In a research report published Friday, Cantor analyst Caroline Corner downgraded shares of Aerie Pharmaceuticals Inc (NASDAQ:AERI), and significantly reduced the price target to $12.00 (from $40), which represents a potential downside of 24.5% from where the stock is currently trading. The decreased rating and price target come after the company reported disappointing efficacy results from the first Phase 3 trial for Rhopressa, the company’s lead glaucoma candidate.

Corner commented: “We think there is significant risk to the compounds not moving forward. However, catalysts for AERI shares include progress with FDA and the Rocket 2 data release expected in 3Q:15, so we are taking a wait-and-see approach. Our price target of $12 is based on applying a 9.0x EV/revenue multiple to our estimated 2020 revenues of $163.1M, previously $399.1, discounted at 30% for five years.”

Furthermore, “Given that Rhopressa did show IOP lowering, the company plans to review Rocket 2 results and commence a Phase 3 Roclatan trial by the end of 2015. We think the combination of Rhopressa and latanoprost could show superiority to the components, although we think demonstrating this at higher pressures could be problematic.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Caroline Corner has a total average return of 5.6% and a 63.6% success rate. Corner has a 17.2% average return when recommending AERI, and is ranked #1810 out of 3579 analysts.

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