AGP cuts EyeGate Pharma PT to $10.25 from $16.75

EyeGate Pharmaceuticals

Alliance Global Partners reduced its price target for EyeGate Pharmaceuticals (NASDAQ:EYEG) to $10.25 from $16.75, citing a possible plan to sell additional common shares in the first half of this year in order to pursue clinical studies. The stock closed at $4.72 on March 30.

“Utilizing 10.1 million as the expected share count drives the entirety of our target reduction,” writes analyst Ben Haynor.

Referring to the company’s latest 10-K filing, Mr. Haynor said EyeGate has begun evaluating the potential to reclassify its ocular bandage gel (OBG) as a drug instead of a medical device.

“While the 510(k) device pathway remains open to the company and would allow a nearer-term regulatory clearance, in our estimation, we see reclassification as a drug as improving the commercial opportunity,” he said. “Nearly half of dry eye disease patients are of Medicare age and we think having coverage under Medicare Part D for OBG certainly broadens the covered population and also could enable increased pricing.”

Mr. Haynor also pointed to the company’s acquisition of Panoptes Pharma and its dihydroorotate dehydrogenase inhibitor, PP-001. The company is exploring two ophthalmologic formulations – PaniJect, an intravitreal injection for inflammatory diseases of the eye, which has completed a Phase 1b/2a study in posterior uveitis, and PaniDrop, an eye drop for conjunctivitis and dry eye disease, which has completed a Phase 1 safety study.

EyeGate also is pursuing possible additional indications beyond ophthalmology for PP-001.