Ocular Therapeutix Inc (NASDAQ:OCUL) shares are sliding almost 5% today on the heels of the biotech firm’s President and CEO Antony Mattessich new leadership, former CEO Amar Sawhney’s transition to Executive Chairman of the Board, and the approved restructuring plan to cut 19% of the OCUL workforce- all announced per the 8-k filed yesterday.
H.C. Wainwright analyst Ram Selvaraju takes the restructuring period for what it is: one that might carry short-term expenses, but ultimately will serve to fuel the company’s long-term trajectory.
On back of the update, the analyst reiterates a Buy rating on shares of OCUL with a $10 price target, which represents a 62% increase from where the stock is currently trading. (To watch Selvaraju’s track record, click here.)
Selvaraju notes, “Ocular expects to substantially complete the restructuring and to record the restructuring charges in the current quarter, with total restructuring costs of approximately $1.5M. With savings realized from the restructuring, the company expects the existing cash to fund operations through 3Q18. We believe the company would continue to focus on its existing pipeline, primarily Dextenza (dexamethasone insert 0.4mg) for the treatment of post-surgical ocular pain and inflammation.”
With regards to the advancement of Dextenza, which the analyst highlights will receive renewed focus, with Mattessich maintaining OCUL’s targets set on Dextenza’s success, last month’s CRL received from the FDA does not have him too shaken. Overall, “In our view, the manufacturing deficiencies could be resolved in roughly six months. We currently project that Dextenza may secure regulatory approval in the U.S. in 2H 2018 and start generating revenue in 2019. Ocular Therapeutix would continue the development of OTX-TP (travoprost insert) and OTX-TIC (glaucoma injection) for the treatment of glaucoma and ocular hypertension, as well as extended release intravitreal depots for the treatment of serious retinal diseases,” Selvaraju contends.
TipRanks analytics show OCUL as a Buy. Out of 5 analysts polled by TipRanks in the last 3 months, 3 are bullish on Ocular stock while 2 remain sidelined. With a return potential of nearly 153%, the stock’s consensus target price stands at $16.00.