Canaccord Analyst Says Aerie Pharmaceuticals Inc (AERI) Is a Hot Shot

Dewey Steadman believes Aerie's Rhopressa is in good standing for Friday's AdCom.


Aerie Pharmaceuticals Inc (NASDAQ:AERI) is a mover and shaker out on the Street today, with investors sparking the stock on an almost 17% upturn. Why such a bullish parade for Aerie today? The FDA just unleashed promising briefing documents for the drug maker’s glaucoma drug Rhopressa ahead of Friday’s advisory committee meeting.

Canaccord analyst Dewey Steadman finds there are “no surprises in generally positive Rhopressa panel docs,” and is angling for the drug to make moves towards a prospective green light in four months.

As such, the analyst maintains a Buy rating on AERI stock with a price target of $65. (To watch Steadman’s track record, click here)

Steadman writes, “We couldn’t find any surprises in the documents and the questions to be discussed appear to be benign and general in nature when compared to other questions from this panel. Overall, while we expect the discussion about rates of hyperemia and the incidence of corneal verticillata to be extensive, we expect Rhopressa to generally fare well at the meeting, setting the stage for a potential February 2018 approval. With meaningful market potential and the ability to revolutionize glaucoma therapy, we continue to like the company and view Aerie as one of the best positioned names in our coverage universe.”

What of possible label edits regarding adverse events? Steadman says not to worry, as this “shouldn’t be a big deal in marketing.” All eyes will be on hyperemia and verticillata, and of course, the “obvious efficacy questions,” as the analyst concludes: “[…] Aerie’s management has extensively used a ‘mild in nature’ argument to talk away both types of events to the investment community as the ROCKET and MERCURY trials reported data. While not ideal, we think Aerie’s marketing program can still work around the hyperemia and verticillata issues with published data sets provided to prescribers.”

Wall Street is rooting for the biotech firm right along with Steadman, with TipRanks analytics exhibiting AERI as a Strong Buy. Out of 8 analysts polled by TipRanks in the last 3 months, all 8 are bullish on Aerie stock. With a return potential of 10%, the stock’s consensus target price stands at $71.13.