Outlook Therapeutics (OTLK) might be a small cap biotech currently going under Wall Street’s radar, but one analyst sees huge potential returns for investors after the company announced strong results for its treatment of neovascular age-related macular degeneration, or wet AMD.
In the Phase 3 NORSE TWO safety and efficacy trial evaluating Outlook’s candidate Lytenava (also referred to as ONS-5010 or bevacizumab), the drug met both its primary and secondary endpoints. Lytenava showed it was superior to Lucentis (ranibizumab) in a statistically meaningful manner in both percentage of subjects with a ≥ 15 letter best corrected visual acuity (BCVA) and a mean BCVA score gain in both the intent to treat (ITT) and per protocol (PP) populations.
The results left H.C. Wainwright’s Douglas Tsao mightily impressed.
“We see the 18% difference in the response rate on ≥ 15 letter BCVA gain as leaving no doubt about Lytenava’s performance, particularly as the study was only powered for a 10% difference,” the 5-star analyst said. “Additionally, Lytenava showed success on the key secondary endpoint of BCVA gain with a gain of 11.2 letters vs just 5.8 letters with Lucentis, a 5.4 letter difference. In meeting both the primary and secondary endpoints as well as continuing to demonstrate safety, we believe this completes the package required for submission and clears the way to approval.”
Which is what Outlook intends to do following successful completion of the phase 3 study. The company will look to submit a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) in 1Q22.
The results position Outlook to make a splash in the “multi-billion-dollar” anti-VEGF market. Tsao “conservatively” estimates Lytenava could reach peak global sales of $680 million across wet AMD, BRVO (branch retinal vein occlusion) and DME (diabetic macular edema).
“Based on our conviction that this data is going to be sufficient for Lytenava to gain regulatory approval,” the analyst summed up confidently, “We raise our probability of success to 80%.”
Accordingly, Tsao also increased his price target from $5 to $6, suggesting shares could add 142% from current levels. No need to add, Tsao’s rating stays a Buy. (To watch Tsao’s track record, click here)
Only one other analyst is currently tracking Outlook’s progress, also recommending to Buy, making the analyst consensus on this overlooked name a Moderate Buy. It will be interesting to see if other analysts join the fray, following the company’s impressive results. (See OTLK stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
