Do Analysts See A Path Forward For Ophthotech's Fovista?

After the release of Ophthotech Corp OPHT's fourth-quarter results, Leerink weighed in on the possibility of a path forward for Fovista, the company's candidate for the treatment of wet age-related macular degeneration.

The Disappointment

The company announced disappointing results from two Phase 3 studies in December, Leerink analysts Joseph Schwartz and Dae Gon Ha said in a note. The studies compared the effectiveness of the drugs Fovista and Lucentis together vs. Lucentis monotherapy.

A recent Ophthotech earnings call provided opportunity for the Leerink analysts to learn more about the strategic review plan the company announced earlier this month.

The Way Forward

Ophthotech is proceeding with a Phase 3 clinical trial of Fovista, administered in combination with Eylea or Avastin. This route could generate a new path to market but would also require additional studies, according to the Leerink analysts.

"If Fovista administration in combination with Avastin or Eylea produces a meaningful benefit in visual acuity, we suspect that OPHT may proceed into another Phase 3 trial to confirm the effect," the Leerink analysts said. The results of the trial, which is fully enrolled as of June 2016, are expected in the second half of 2017.

The firm estimates a 25 percent probability of success for this latest program, based on negative read-through from the failure of the recent Phase 3 programs.

The Strategic Review

Leerink referred to the management's confidence in its experienced team, which it believes is well suited to evaluate licensing, M&A and collaboration opportunities. Additionally, the management is considering whether Fovista and/or Zimura is suitable for clinical development in additional indications. The analysts said investors may want actionable updates on the company's review of strategic alternatives in the coming months.

Removing Fovista And Lucentis From Model

Leerink said it's removing the 10 percent probability of success it had factored in for Fovista and Lucentis from its model for Ophthotech.

Leerink reiterated its Market Perform rating for the pharma company and lowered its price target from $7 to $4.

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