In a research report issued Friday, Brean Capital analyst Difei Yang reiterated a Buy rating on Aerie Pharmaceuticals Inc (NASDAQ:AERI), and reduced the price target to $24 (from $46), which represents a potential upside of 87% from where the stock is currently trading. The decreased price target comes in response to the company’s announcement that its first Phase 3 registration trial (Rocket 1) for Rhopressa did not meet its primary efficacy endpoint, sending shares plunging 64%.

Yang wrote, “We believe the correction is overdone for several reasons: 1) while non-inferiority was not proven, Rhopressa clearly demonstrated efficacy. We view the negative results on Rocket 1 as more of a speed bump than a road block; 2) there may be an opportunity for the company to change primary end point on Rocket 2 prior to unblinding the data based on learning from Rocket 1, thus increasing the probability of success; 3) development and registration pathway for Roclatan is not tied to the success of Rhopressa, although we adjusted the success rate of positive Phase III trials to 50% from 80% to account for higher risks; and 4) the market share is unlikely being impacted even if the labeling may be more restrictive as we believe the unmet medical needs lie in the needs for medications with new mechanism of actions.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Difei Yang has a total average return of 22.2% and a 73.0% success rate. Yang has a 13.8% average return when recommending AERI, and is ranked #308 out of 3579 analysts.

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