Ocular Therapeutix Inc (NASDAQ:OCUL) shares slumped nearly 20% after the drug maker announced that it received a complete response letter (CRL) from the U.S. Food and Drug Administration (FDA) regarding its NDA resubmission of DEXTENZA in post-surgical ocular pain. The FDA has issued a CRL due to outstanding Form 483 issues, with no issues raised regarding clinical safety and efficacy.

In reaction, Cantor analyst Elemer Piros slashed his price target to $21 (from $35), while reiterating an Overweight rating on the stock. (To watch Piros’ track record click here.)

Piros commented, “Although the CRL creates a delay in the approval timeline, we maintain our belief that Ocular will be able to address the issues raised from the Form 483 and will achieve approval with a resubmission of its application for DEXTENZA in post-surgical ocular pain. In the FDA’s CRL, no questions were raised regarding clinical efficacy and safety data with DEXTENZA. The FDA also noted that the decision to issue a CRL was made prior to receipt of the amendment, despite its acknowledged receipt. Based on these events, and even though we maintain our belief in the likelihood of approval for the drug, we believe additional time will be required to achieve approval.”

“We have updated our model following the CRL to account for the delayed timing of a potential drug launch by a year. We expect Ocular to delay its commercial preparation efforts until it comes closer to a potential PDUFA, and we incorporate a reduction in sales, marketing, general and administrative expenses in our model. In addition, we believe the focus on a DEXTENZA resubmission and considerations for cash resources could shift pipeline resources,” the analyst continued.

Out of the 5 analysts polled by TipRanks (in the past 12 months), 3 rate Ocular stock a Buy, while 2 rate the stock a Hold. With a return potential of 397%, the stock’s consensus target price stands at $29.67.