Spark Therapeutics Has a Viable Hep A Program on Its Hands

Spark Therapeutics Inc (NASDAQ:ONCE) shares are jumping almost 20% after the biotech firm’s second quarter print proved to be kind to investors, revealing a clinical update that has the Street excited today.

Cowen analyst Phil Nadeau for one finds the company’s lead investigational candidate for hemophilia A, SPK-8011 produced “encouraging” initial data in three patients coupled with a low 5e11 dose producing average FVIII levels of 12% in two patients. All this combined with starting indications of dose proportionality in a third, and the analyst has become increasingly bullish on Spark’s prospects.

In reaction, believing the early data suggests “Spark has a viable and competitive Hem A program,” the analyst reiterates an Outperform rating on shares of ONCE while bumping up the price target from $75 to $95, which implies a 19% upside from where the stock is currently trading. (To watch Nadeau’s track record, click here.)

“Spark indicated that thus far SPK-8011 has been safe and well tolerated, with no reports of serious adverse events, no factor VIII inhibitors, no thrombotic events, no immune responses, no elevations of liver enzymes, and none of the participants has required the use of corticosteroids.”

Though the results of these three patients were taken over a “relatively short period of time,” making the data “preliminary,” the analyst still sees fit to view the data as quite positive. Not only did the Hep A drug produce “stable and clinically meaningful Factor levels” even considering a minimal starting dose of 5e11, the analyst writes, “In fact, the literature would suggest that the average 12% level that was achieved should be sufficient to prevent spontaneous bleeds in patients.”

“Moreover, with SPK-8011’s safety profile clean thus far, and with there being early signs of dose-proportionality, it would appear that Spark will be able to achieve greater Factor levels at higher doses. There is some debate among our physician consultants […] Nonetheless, most say that the ideal Factor VIII gene therapy would produce predictable, consistent (little interpatient variability) and stable levels with few immune responses. While SPK-8011’s data are early, thus far they suggest SPK-8011 could have such a profile,” Nadeau concludes.

TipRanks analytics demonstrate ONCE as a Strong Buy. Out of 10 analysts polled by TipRanks in the last 3 months, all 10 are bullish on Spark Therapeutics stock. With a return potential of nearly 7%, the stock’s consensus target price stands at $85.11.

Ocular Therapeutix in Turnover Mode

Ocular Therapeutix Inc (NASDAQ:OCUL) shares are dashing roughly 4% today following the biotech firm team’s announcement yesterday that in addition to new leadership, the Ocular headcount has now been chopped by about 19%. What a harsh welcome to new CEO Antony Mattessich.

BTIG analyst Dane Leone does not believe personnel cuts will greatly impact the firm’s Travoprost (OTX-TP) program, and likewise takes the transition as a largely good step forward for the company. However, the real question will be how the new CEO can handle the Complete Response Letter (CRL) hanging over Dextenza, the firm’s drug designed to treat ocular pain after ophthalmic surgery. For Leone, what happens with Dextenza is not a make-or-break for the stock necessarily, but surely carries meaningful weight in deciding the future success of the firm.

As such, the analyst reiterates a Neutral rating on OCUL without listing a price target. (To watch Leone’s track record, click here.)

Leone notes, “We spoke with Mr. Mattessich, who although was unable to say much ahead of the earnings call on August 8th, did clarify a few points regarding the transition. Overall, we view the transition as positive, but remain Neutral as we wait to see how the new CEO works through the CRL for Dextenza, which is a major stock catalyst for OCUL.”

Importantly, “A majority of the cuts to the headcount were limited to the commercial team,” explains the analyst, continuing, “The timeline for the Travoprost (OTX-TP) program should remain unaffected by the personnel cuts: With the personnel cuts mostly limited to the commercial team, mgmt does not anticipate any delays to the OTX-TP program, which is crucial to the extension of the pipeline due the large market opportunity.”

However, in the grander scheme, “We continue to think that investors would not become comfortable until the new CEO can present his vision for the company,” surmises Leone, who remains firmly on the sidelines for now.

TipRanks analytics indicate OCUL as a Buy. Based on 5 analysts polled by TipRanks in the last 3 months, 3 rate a Buy on Ocular stock while 2 maintain a Hold. The 12-month average price target stands at $16.00, marking a nearly 157% upside from where the stock is currently trading.