Moving on Up: Ocera Therapeutics Inc (OCRX), Aurinia Pharmaceuticals Inc (AUPH)


Ocera Therapeutics Inc (NASDAQ:OCRX) and Aurinia Pharmaceuticals Inc (NASDAQ:AUPH) are soaring up, up, and away into the biotech-verse stratosphere today, and Aegis and Canaccord are taking notice. One analyst highlights Ocera’s competitive advantage over Valeant Pharmaceuticals Intl Inc (NYSE:VRX) in the indication of Hepatic Encephalopathy, while another analyst spotlights meaningful long-term potential ahead for Aurinia’s voclosporin, specifically its transition to the Japanese market. Let’s dive in:

Ocera Could Knock Valeant’s Xifaxin Out of the Water

Ocera shares are skyrocketing 58% on the heels of the biotech firm announcing yesterday at the Cowen and Company 37th Annual Healthcare Conference supplemental positive results are forthcoming from OCRX’s Phase 2b STOP-HE trial.

The study reveals lowered ammonia that correlates statistically with clinical improvement in intravenous (IV) OCR-002 in hospitalized patients with Hepatic Encephalopathy (HE). Further evaluation of the firm’s pipeline drug indicates statistically significant improved response rates over placebo at 48 hours. In reaction, Aegis analyst Difei Yang reiterates a Buy rating on OCRX with a $3 price target, which represents a 75% increase from where the stock is currently trading.

Yang notes, “While a dose-related clinical benefit was observed in the COR-002 arm of the STOP-HE trial, the data was not statistically significant. Subsequent analysis from the trial pointed to two parameters of the trial’s design that could be improved. We view these two takeaways in a positive light and are confident with changes to future trials, a positive read-out would be more likely. As we have said in our last note, we strongly believe the efficacy of OCR-002 is present, just need to find a way to prove it in a controlled trial.”

Moreover, the analyst underscores new insights came to light regarding OCR-002 rival Xifaxin from Valeant, noting that the further data portrays Ocera’s drug in a stronger stance to treat HE in an acute setting. “Key findings are: 1). OCR-002 may have similar/superior efficacy than Xifaxin in treating HE; 2). Based on Xifaxin’s labeling information, its side effect profile does not seem appropriate for most of HE patients ( ~70%), while OCR-002 may has the potential to play an important role,” elaborates the analyst.

Moving forward, the biotech firm intends to meet with the FDA at the end of its Phase II trial during the third quarter of this year. “[…] the company is optimistic about FDA’s endorsement into Phase III trial, which could lead to topline read-out in 2H2019,” Yang concludes.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Difei Yang is ranked #621 out of 4,514 analysts. Yang has a 44% success rate and realizes 7.2% in her annual returns. However, when recommending OCRX, Yang forfeits 60.2% in average profits on the stock.

TipRanks analytics show OCRX as a Buy. Out of 3 analysts polled by TipRanks in the last 3 months, 2 are bullish on Ocera stock and 1 remains sidelined. With a return potential of 124%, the stock’s consensus target price stands at $3.50.

Aurinia Could Secure Long-Term Success Thanks to Voclosporin 

Aurinia shares are shooting up 14% today on back of the biotech firm’s fourth-quarter and full year 2016 financial results that excited investors with a clinical progress update. Between further data analysis impending for the AURA trial coupled with the momentum of lupus nephritis (LN) drug voclosporin carrying it to a Phase 3 trial, both expected by the second quarter of this year, Canaccord analyst John Newman is positive on the future success of the drug.

Therefore, the analyst reiterates a Buy rating on AUPH with a price target of $10, which represents a 23% increase from where the shares last closed.

Anticipating a presentation from AUPH at the National Kidney Foundation Scientific Clinical Meetings, the analyst believes the data “[…] could continue to support the stock’s climb. The AURA study demonstrated voclosporin achieved complete and partial remission endpoints at week 48 vs week 24 for treating lupus nephritis (LN), and both doses showed statistical significance vs control, a significant positive. Particularly, we will be focused on any analysis regarding patients achieving partial response to complete response conversion between week 24 and week 48, since this suggests that therapeutic effect persists for patients who can tolerate the dosing.”

Ultimately, “We are maintaining our BUY rating and $10 PT based on our view that voclosporin has demonstrated efficacy in LN treatment. We expect positive results in Phase 3 to create significant shareholder value long-term. Furthermore, we also anticipate smooth clinical and commercial development in the Japanese market, which increases voclosporin’s revenue potential and long-term value,” Newman surmises.

According to TipRanks, John Newman is ranked #4,386 out of 4,514 analysts. Newman has a 39% success rate and faces a loss of 6.7% in his yearly returns. However, when recommending AUPH, Newman earns 56.8% in average profits on the stock.

TipRanks analytics indicate AUPH as a Strong Buy. Based on 3 analysts polled by TipRanks in the last 3 months, 3 rate a Buy on Aurinia stock. The 12-month average price target stands at $10.33, marking a 27% upside from where the stock is currently trading.

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