Xoma Ltd (NASDAQ:XOMA) shares are dropping 76.56% to $1.03 in mid-day trading , following the announcement that Gevokizumab failed to meet the primary endpoint in its Phase 3 EYEGUARDB trial in patients with Behçet’s disease uveitis (BDU). Xoma announced that gevokizumab did not achieve statistical significance for the primary endpoint of time to first acute ocular exacerbation in its Phase 3 trial in patients with a history of BDU.
In reaction, Wedbush analyst Liana Moussatos reduced the price target to $13 (from $17), while reiterating an Outperform rating on XOMA stock. The analyst have removed her non-infectious uveitis/Behçet’s revenue projections and value from her price target.
Moussatos wrote, “While we have removed non-infectious uveitis (NIU) from our valuation and revenue projections, we do not believe the game is over for gevokizumab in NIU. Management mentioned that the ongoing EYEGUARD-A and –C trials in NIU could complete enrollment in the next few months (we anticipate data releases ~YE:15 for EYEGUARD-C and H1:16 for EYEGUARD-A).”
The analyst continued, “We believe these treatment-designed trials (vs prevention designed EYEGUARD-B) may be better designed for success since both Phase 2 trials had treatment designs and every patient responded to a single dose. It is our understanding the both EYEGUARD-A & C would need statistically significant primary endpoints in order for XOMA to file. Therefore, we view NIU as a call option if both -A and -C readout positive data.”
“Gevokizumab still holds plenty of value in our view. In addition to NIU, gevokizumab is being tested in neutrophilic dermatoses, ACS, anterior scleritis, and diabetic nephropathy. The company also has XMet and anti-TGFβ programs”, the analyst concluded.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Liana Moussatos has a total average return of 36.9% and a 55.2% success rate. Moussatos has a -0.6% average return when recommending XOMA, and is ranked #25 out of 3711 analysts.
Out of the 6 analysts polled by TipRanks, 4 rate Xoma stock a Buy, while 2 rate the stock a Hold. With a return potential of 824.2%, the stock’s consensus target price stands at $10.17.