Ophthotech Misses the Mark on Third Eye Drug Treatment

It was a rough start to the week for Ophthotech (NASDAQ:OPHT),  who announced on Monday (August 14) that it failed to meet its endpoint of mean change in visual acuity at the 12-month mark for a Phase 3 clinical trial of Fovista (pegpleranib) compared to Eyla or Avastin.
The clinical trial, dubbed OPH1004, saw Fovista used in combination with the two products it was also competing against with approximately 640 patients dealing with wet macular degeneration (Wet AMD), a condition that “accounts for 90 percent of the severe vision loss caused by macular degeneration.”
“This outcome does not affect our strategy,” president and CEO of Ophthotech Glenn Sblendorio said in the press release. He added the company will be moving forward with their planned clinical programs in the back of the eye indications.
According to the company’s statement, the most significant “ocular adverse” took place with the injection procedure. Ophthotech announced it won’t be treating patients as part of the second year of studies for this trial.
OPH1004 was the third phase 3 clinical trial for the company’s eye drug. Back in 2016 they also failed to meet their endpoint for two other trials.
“[W]hich means the total monetary damages can be tallied. The sums are staggering, a Stat News newsletter indicated, their rough calculation landed at $325 million, while the company’s estimated loss in market value was $2.6 billion.
Ophthotech reported a net loss of $22.2 million for the second quarter of 2017, which represented a $0.62 loss per diluted share. The company had previously prepared investors for a possible trial failure for OPH1004, since it missed the mark on their two previous studies. Similarly, a competitor had seen no success in a Phase 2 clinical trial investigation of a PDGF inhibitor and VEGF inhibitor.
The National Eye Institute, as reported by Xconomy, would have affected close to 5.5 million people by 2050 in the US.

Analyst remarks on Ophthotech

As part of a report published on July 26, following Ophthotech’s most recent financial report, Chardan analysts Gbola Amusa and Madhu Kumar lowered their price target from $4 to $3 for OPHT.
“In reviewing Ophthotech’s corporate deck for the rationale behind the 7-8 programs that may be explored, we see mostly mechanistic product logic, without much in the way of proof-of-concept preclinical or clinical data needed for us to model the programs with confidence,” the analysts wrote in the note to investors.
In March analysts at Leerink had predicted if OPH1004 had produced any significant results, then Ophthotech would have moved into another phase 3 trial.

Investor Takeaway

Despite the trial failure, Ophthotech didn’t see an immediate decline in its stock. However, the story is quite different when you look at the year as a whole.
During after hours trading on Tuesday, Ophthotech was valued at $2.72, with a minor 0.37 percent increase during the day. Following Monday’s announcement, the company’s stock increased 6.67 percent. Over a year-to-date period, Ophthotech has faced a 44.1 percent decrease. Interestingly, since the two trial failures in December, the company’s stock value has slid over 90 percent.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.