Ocular Therapeutix Rises 7% On Stellar Results Backed By Dextenza

Shares of Ocular Therapeutix rose 7% on Nov. 6 after the biopharma reported better-than-expected third quarter results driven by the demand for Dextenza, a corticosteroid that treats ocular inflammation and pain following ophthalmic surgery.

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Ocular Therapeutix’s (OCUL) 3Q revenue increased 609% year-over-year to $5.88 million and exceeded analysts’ consensus by $0.02 million. The top-line gained from higher Dextenza revenue driven by the continued re-opening of Ambulatory Surgery Centers (or ASCs) and Hospital Outpatient Departments (or HOPDs).

The company also attributed the increase in Dextenza revenue to the “impact of the DEXTENZA rebate program and the more recent physician payment of the procedure CPT code 0356T by some of the MACs [Medicare Administrative Contractors].”

Meanwhile, Ocular posted a net loss per share of $0.21 in 3Q20 down from a net loss per share of $0.45 in 3Q19. Ocular fared better than analysts’ forecast of a loss per share of $0.23

Ocular CEO Antony Mattessich commented “DEXTENZA’s momentum continues as a result of key initiatives implemented earlier in the year and exemplified by a robust 280% increase over the prior quarter. This momentum has continued into the fourth quarter with nearly 4,200 billable inserts sold to ASCs and HOPDs in the month of October.”

“Within our pipeline, we have four clinical-stage programs that are each highly differentiated ophthalmology specialty products in markets where current annual global sales are estimated to exceed $20 billion,” added the CEO.

“With an improved cash position following the completion of a successful financing in October and the recently concluded license agreement with AffaMed Therapeutics, we believe we are now in a position to fund each of these four planned programs through its respective read-out of Phase 2 clinical trial data to capture the full potential benefit of the Phase 2 value inflection.” (See OCUL stock analysis on TipRanks)

Following the earnings release and pipeline update, Piper Sandler analyst Joseph Catanzaro increased his price target for Ocular Therapeutix to $16 from $14 and reiterated a Buy rating.

In a research note to investors, the analyst also noted that the company’s next week’s OTX-TKi (chronic treatment of dry eye disease) update will include updated data from cohorts 1 and 2, which is likely to be “incremental” but will still provide “important insight” around durability and long-term tolerability of the program.

With shares advancing a whopping 226% year-to-date, the average analyst price target of $15.25 indicates upside potential of about 19% in the coming months. Ocular scores a Strong Buy analyst consensus based on 4 unanimous Buys.