Has Aerie Pharma Put The 'Binary Boogeyman' To Bed With Roclatan Phase 3 Data?

Aerie Pharmaceuticals Inc AERI shares were seen up over 29 percent Thursday after the company reported positive Phase III trial data on its glaucoma treatment candidate, Roclatan. According to the company, Roclatan achieved the primary efficacy endpoint in demonstrating superiority over both latanoprost and Rhopressa.

Investors cheered the positive news, but Aerie may have even more upside in the months ahead, H.C. Wainwright analyst Corey Davis said.

“Amidst reporting broad success in its Phase 3 MERCURY 2 trial of Roclatan vs. its Rhopressa and latanoprost subcomponents at all 9 observed timepoints, responder analysis indicating 32 percent of patients reached IOPs below 14 mmHg by the end of the 90-day treatment period was particularly impressive in our view, as this is likely the most convincing data for prescribing physicians leading up to NDA filing for Roclatan in IH 18,” Davis said.

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The binary risk involved in the Roclatan Phase III study has now been eliminated, leaving the door open for Aerie stock to soar, Davis said.

Between now and the expected NDA filing for Roclatan in early 2018, the only potential meaningful stock catalyst remaining is the 12-month safety and efficacy update from the MERCURY 1 trial, which Davis expects will come in Q3 of this year. Based on the string data Roclatan has demonstrated so far, Davis said it is unlikely the long-term study will reveal any potential concerns.

H.C. Wainwright is projecting a 2018 FDA approval and a 2019 commercial launch for Roclatan.

The firm maintains a Buy rating and a $69 price target for the stock.