In a research note issued Wednesday, H.C. Wainwright analyst Ram Selvaraju reiterated coverage on shares of Kala Pharmaceuticals (NASDAQ:KALA), with a Buy rating and price target of $35, which represents a potential upside of 173% from where the stock is currently trading. The reiteration follows the news that the company's third phase 3 trial (STRIDE 3) of KPI-121 0.25% for the treatment of dry eye disease (DED), had dosed its first patient.
Selvaraju wrote, "The STRIDE 3 trial design has specific modifications to the inclusion/exclusion criteria to address key factors that could improve the probability of success, according to management. Investors may recall that KPI-121 0.25% did not meet the primary symptom endpoint in one of the two previously-completed Phase 3 trials. In our view, STRIDE 3 would need to meet the symptom endpoint, but not necessarily the sign endpoint, to be considered sufficient to complete the New Drug Application (NDA) package. Thus, the STRIDE 3 trial design could have been optimized to increase the probability of meeting the primary symptom endpoint. We continue to believe that KPI-121 0.25% could obtain regulatory approval in 2020 and become the first FDA-approved product for short-term treatment of DED."
In addition, Kala has a key catalyst on its hands this summer when it comes to lead asset INVELTYS (KPI-121 1%), designed to treat patients with post-surgical ocular inflammation and pain. KALA's INVELTYS has a PDUFA date set for August 24 and the analyst expects 85% odds that the treatment gets a green light. If approved, INVELTYS would be the first FDA-approved corticosteroid eye drop with a twice-daily dosing regimen.
The analyst also maintained coverage on Durect (NASDAQ:DRRX) with a Buy rating and a $3.00 price target, following the news that Durect partner Indivior received FDA approval for PERSERIS, the first once monthly subcutaneous risperidone-containing, long-acting injectable for the treatment of schizophrenia in adults.
Finally, H.C. Wainwright's Andrew Fein affirmed a Buy rating on shares of Amarin (NASDAQ:AMRN), with a $10 price target, as he sees attractive risk/return profile ahead of REDUCE-IT topline data, which is about to be released this September.