RBC Capital reaffirmed its Outperform rating on Ocular Therapeutix (NASDAQ: OCUL) and kept a $30.00 price target on the shares, according to a research note released Friday. That price objective implies substantial upside from the stock’s recent trading level of $9.26, while analyst targets among peers span from $19 to $31.
The research note called out that OCUL has lagged the biotech exchange-traded landscape so far this year. The firm noted a roughly 28% year-to-date decline in OCUL shares versus a 2% gain in the XBI biotech index. InvestingPro data reflected a similar drop, listing the year-to-date change at -26.61%. RBC also observed that technical gauges, including the relative strength index, indicate the stock is in oversold territory.
RBC analyst Lisa Walter expressed continued conviction in the upcoming SOL-1 pivotal trial readout. The note said the SOL-1 study remains on schedule and that the broader long-acting tyrosine kinase inhibitor - TKI - drug class has produced encouraging Phase I/II results in wet age-related macular degeneration, supporting the rationale for SOL-1’s development program.
The firm cited several drivers underpinning its favorable stance. First, proprietary trial simulations conducted by RBC suggest SOL-1 could meet the firm’s expectations for the pivotal endpoint. Second, management has strengthened its commercial bench with the appointment of a new Global Chief Commercial Officer, which RBC views as an operational positive as the company advances retinal programs. Third, Ocular Therapeutix has initiated plans to start two pivotal studies in diabetic retinopathy ahead of the wet AMD readout, a strategic sequencing that the analyst views as noteworthy.
RBC quantified scenario outcomes tied directly to SOL-1 performance. If SOL-1 produces a 50% delta on the study’s primary endpoint, RBC projects potential upside in excess of 100% for OCUL shares. Conversely, the firm emphasized that a failed study would expose the stock to downside risk exceeding 30%.
Despite RBC’s optimism, InvestingPro analysis cited in the note flagged that the stock may be trading at a valuation that some models consider rich at current levels. The RBC report also points readers toward a more detailed Pro Research Report that includes additional analysis and ProTips for OCUL alongside coverage of over 1,400 U.S. equities.
The company has had a flurry of recent corporate developments that market participants are watching. Chief Financial Officer and Chief Operating Officer Donald Notman is on temporary medical leave, with Jason Robins serving as interim CFO in the meantime. Ocular Therapeutix also named David W. Robinson as Global Chief Commercial Officer as it progresses AXPAXLI, an investigational retina treatment currently enrolled in Phase 3 testing.
Separately, there are reports that Sanofi is preparing to increase a takeover offer after Ocular Therapeutix’s board declined a first bid of $16 per share. On the sell-side, TD Cowen reiterated a Buy rating with a $20 price target, which the firm said implies about 45% upside contingent on SOL-1 Phase III success. Citizens kept a Market Outperform rating with a $29 target and highlighted the importance of SOL-1 when comparing Axpaxli to the competing product Eylea.
Taken together, the analyst shop’s reiterated Outperform, the company’s pipeline sequencing and commercial hires, ongoing leadership changes, and takeover chatter have combined to create a period of heightened activity and potential inflection points for Ocular Therapeutix.