TD Cowen Downgrades EyePoint Inc. (EYPT) to Hold

TD Cowen analyst Tara Bancroft downgraded EyePoint Inc. (NASDAQ: EYPT) from Buy to Hold with a price target of $4.00 (from $20.00).

The analyst comments: “Following the failure of EyePoint's first Phase III wAMD study (note here), we found the LUGANO post-hoc analysis instructive and are sympathetic that the nine patients could represent an anomalous randomization scenario that disproportionately affected the Duravyu arm. Conversely, we realize that the chance of this occurring is rare and expect pervasive skepticism from both investors and regulators as a result.

Even so, the post-hoc analysis resulted in a -2.4 letter difference with a CI lower bound of ~4 letters (per management) after removing the ~4% of the worst performing patients, which we do not view as strong enough to significantly increase our expectations for LUCIA's success. LUCIA enrolled as fast as LUGANO (~7 months), with the only difference being the inclusion of ex-US patients in LUCIA.

Even if LUCIA succeeds, the regulatory path forward could face significant uncertainty. We view it is as unlikely that the Agency accepts the post-hoc analysis, since there is no precedence of this within the ophtho division to our knowledge. The most favorable scenario, though still uncertain, would likely come from combining the LUGANO and LUCIA data and demonstrating non-inferiority in a pooled analysis. However, LUCIA would need to be markedly better on BCVA than even the -2.4-letter post-hoc analysis to support a significant pooled result, which we also have reduced confidence in.

Beyond this, there are additional longer-term concerns with the use of Duravyu as a potential wAMD maintenance therapy. The BCVA curves (in the post-hoc analysis too) exhibit a decline in BCVA in the last few months, something we expect would worsen with longer follow-up in year two given some of the patients may still be benefiting from the early three-dose load this late in the study”

For an analyst ratings summary and ratings history on EyePoint Inc. click here. For more ratings news on EyePoint Inc. click here.

Shares of EyePoint Inc. closed at $4.58 yesterday.

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