This Analyst Upgrades Vision Disorder-Focused Outlook Therapeutics' Prospects After FDA Agreement Despite Investor Concerns

Thursday, Outlook Therapeutics Inc OTLK announced it completed the requested Type A Meetings with the FDA to discuss the Complete Response Letter (CRL).

The FDA informed Outlook Therapeutics that an additional adequate and well-controlled clinical trial would be required for the approval of ONS-5010 for the treatment of wet AMD. 

Outlook Therapeutics reached an agreement in principle with the FDA on a clinical trial design that would most likely allow for the resubmission of the ONS-5010 BLA as early as the end of 2024 and subsequent approval around mid-2025.

HC Wainwright upgraded the stock to Buy from Neutral, citing visibility and a faster path to market, and increased the price target from $1 to $2.

Outlook shares were off sharply yesterday, which the analyst thinks was due to some investors hoping that the company would avoid the need for a large clinical trial. 

Outlook management had suggested that could be avoided, and, the cost of this new study is going to necessitate additional financing.

Analyst Douglas Tsao estimates the new study will cost $ 35 million-$40 million. 

Throughout the years, numerous investors have harbored concerns regarding the ONS-5010 development program due to its unprecedented nature, particularly the requirement for a single, comprehensive, and well-controlled trial. 

The FDA's issuance of a complete response letter essentially acknowledged this skepticism. Nevertheless, now that the company and FDA are in agreement, HC Wainwright envisions a clear and uncomplicated route to approval, one that will gradually instill confidence in investors.

Price Action: OTLK shares are up 22.6% at $0.42 on the last check Friday.