Bull of the Day: Aerie Pharmaceuticals Inc (AERI)

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Aerie Pharmaceuticals Inc (NASDAQ:AERI) shares jumped over 50%, after the glaucoma drug company announced positive top-line efficacy results from its Phase III “Mercury 1” clinical trial for Roclatan, a fixed dose combination product designed to treat glaucoma. Roclatan demonstrated a statistically significant reduction in IntraOcular Pressure (IOP) which beat out Rhopressa and latanoprost by 1.8-3.0 mmHg and 1.3-2.5 mmHg, respectively.

Brean Capital analyst Difei Yang commented, “The positive Mercury 1 read-outs not only give Roclatan the opportunity for FDA approval, we think the data where it shows that 61% of Roclatan treated patients had IOP below 16mmHg vs. 39% for latanoprost alone arm and 32% for Rhopressa alone arm. Similar trend were also observed for post treatment IOP of 15mmHg and 14 mmHg or below. While this may have significant implication to the upside of Roclatan peak year revenue, at the current moment, we would hold off revising our forecast until we can quantify this upside. This efficacy in lower IOP range may prove to be a key differentiation in the Japanese market where untreated glaucoma patients tend to have lower IOP. Again, for the time being, we would leave it as upside.”

The analyst concludes, “The results, reconfirming potential for Roclatan, showed statistically significant superiority over both latanoprost and Rhopressa at each of the nine measured time points with baseline IOPs from above 20 to below 36 mmHg. While the share price went up to ~$34/share during after-market session, we believe it is still not giving the full credit of potential commercial value of Rhopressa and Roclatan.”

Yang reiterated a Buy rating on shares of Aerie Pharma with a price target of $48, which represents a potential upside of 46% from where the stock is currently trading.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Difei Yang has a yearly average return of -9.2% and a 34% success rate. Yang has a 14.6% average return when recommending AERI, and is ranked #3988 out of 4151 analysts.

As of this writing, all the 6 analysts polled by TipRanks (in the past 3 months) rate AERI stock a Buy. With a return potential of nearly 45%, the stock’s consensus target price stands at $47.20.


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