And we’re off on another week of action in the biotechnology space and – if last week is anything to go by – it looks as though we are in for a pretty full week. Here’s a look at two of the end of the week movers last week that we expect will continue to move as the session kicks off on Monday, with an analysis of where we expect each to go near term.
The two companies in our crosshairs for the session today are Inotek Pharmaceuticals Corporation (NASDAQ: ITEK) and Ocular Therapeutix Inc (NASDAQ:OCUL).
Okay, let’s kick things off with Inotek.
This one is a classic data-driven biotechnology move. After hours on Friday, Inotek put out data from a phase II study of one of its lead development assets, a drug called Trabodenoson. The company was investigating it as a potential therapy for glaucoma, as and when used in combination with an already approved (and standard of care) asset called latanoprost. The trial was a fixed dose combination (FDC) study, designed to assess the benefit/risk profile of the different fixed-dose combinations being evaluated. Importantly, it wasn’t powered to assess statistical significance of the combination across doses but the top line primary endpoint, which measured intraocular pressure (IOP) reduction from diurnal baseline for a two-month treatment period, can be seen as indicative of efficacy between the combination and a monotherapy of latanoprost in this population.
And as it turns out, things don’t look great for the drug.
As per the latest release, Inotek noted that, after eight weeks of treatment, no meaningful clinical advantage in IOP reduction for the fixed dose combinations was observed.
In other words, the addition of Trabodenoson to a course of latanoprost in this targeted glaucoma population doesn’t seem to have any effect in terms of long-term efficacy on the population in question and, with an albeit low potential for added tolerability issues associated with the inclusion of an extra compound in a drug course, there seems to be very little by way of incentive to prescribe the drug over the monotherapy.
So, of course, this is an issue for Inotek, and markets are responding in line with this statement. The company took a real hit during after hours trading on Friday and will open the session on Monday at around the 45% discount to its Friday evening close, trading for a market capitalization of $46.55 million.
Chances are, during the session today, we will see some degree of a near-term continuation of this downside action, as those unable to participate in after-hours trading close out positions in line with the overarching trend.
Next up, Ocular.
This one is a bit of an odd one.
The company is attempting to develop a range of therapies targeting various indications related to (as its name suggests) eye conditions and the lead of said therapies is a drug called DEXTENZA, which the company is trying to get approved in a target indication of ocular inflammation and pain following cataract surgery.
There is a submission with the agency right now and it is set for completion on July 19, which is the submission’s PDUFA date.
On Friday, however, journalist Adam Feuerstein reported that the company is still having issues responding to manufacturing concerns noted in a Form 483 issued by the FDA in May. Specifically, and as per this article, Feuerstein suggests that the contamination of the active drug with certain compounds, including aluminum, could weigh on its potential to pick up approval as and when it goes in front of the FDA come July 19.
On the back of the news, the company has taken a real hit and currently trades for a more than 25% discount to its market capitalization ahead of the article hitting press.
In reality, the article itself is purely speculative and there is no really new information hitting press here. There is a good chance that – as and when the drug is judged – the FDA will give it the green light and, in turn, that we will see this company recover the vast majority of its strength moving forward into the middle of the third quarter 2017.