RBC Capital Boosts PT on Aeri Pharma (AERI) to $44 Following Rhopressa Phase 3 Data
RBC Capital lifts its price target on Outperform-rated Aerie Pharmaceuticals (Nasdaq: AERI) from $31 up to $44 following news that Rhopressa Phase 3 met its primary endpoint.
Analyst Michael J. Yee noted the following key points:
- Safety is in-line and not too different from Rocket 1. Hyperemia is a known side effect and it was higher in the BID than the QD arm; however, of the 35% with increased redness, 83% scored as mild and 16% as moderate. Early terminations were 18%, roughly half due to hyperemia. Since most was rated mild we think the drug is tolerable.
- Debate seems to be around benefit and commercial uptake. Though Rhopressa showed numerical superiority at fewer time points in R2 than R1, timolol also performed better in R2 than R1. In the end what we think matters is Rhopressa gets approved and, if it does, we believe the drug could see use as a standalone and combination agent. The label is typically for glaucoma and ocular hypertension, though clinical section would mention lower baseline IOP in studies.
- Roclatan could be even bigger and that’s the ultimate upside driver. R1 showed synergy between Rhopressa and PGA (less evident here given possible longer washout). Should Roclatan demonstrate superiority to its components in Mercury 1 (M1), we believe there would be little to no controversy that Roclatan could be a blockbuster drug.
- Raising price target; more news flow due in 2016. R3 (safety) could read out by YE:15/ early 2016 but it is the R4 and M1 studies that could be the next major upside drivers. AERI will also be hosting an analyst event at the annual AAO meeting, where we think more analyses from R2 could be presented as well as pre-clinical data including on other candidates.
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