H.C. Wainwright analyst Douglas Tsao downgraded the rating on Outlook Therapeutics to a Hold today, setting a price target of $1.00.
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Douglas Tsao has given his Hold rating due to a combination of factors impacting Outlook Therapeutics. The recent issuance of a Complete Response Letter (CRL) by the FDA for the ONS-5010 application in wet AMD has created uncertainty regarding its approval path in the U.S. Despite the drug demonstrating non-inferiority at 12 weeks, it failed to meet the primary endpoint at 8 weeks in the NORSE 8 study, prompting the FDA to request additional efficacy evidence. This situation suggests that another Phase 3 study might be necessary, which complicates matters given the company’s current cash position.
Furthermore, while the commercialization of Lytenava (ONS-5010) in Europe, particularly in Germany, has shown some promise, it faces competition from off-label use. The company’s focus on expanding into other European markets could drive growth, but it will take time to achieve significant market penetration. The expectation of stock dilution and the need for additional capital to support operations also contribute to the Hold rating. Consequently, Tsao has adjusted the price target to $1.0 per share, reflecting these challenges and uncertainties.
Tsao covers the Healthcare sector, focusing on stocks such as Crinetics Pharmaceuticals, Daré Bioscience, and Protagonist Therapeutics. According to TipRanks, Tsao has an average return of 11.1% and a 48.58% success rate on recommended stocks.