Why Ocular Therapeutix Shares Are Getting Crushed

By Chris Lange Updated Jan 12, 10:13AM EST · Published Jul 12, 10:25AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Why Ocular Therapeutix Shares Are Getting Crushed — © Thinkstock

Ocular Therapeutix Inc. (NASDAQ: OCUL) shares were absolutely crushed on Wednesday after the firm received less than favorable news from the U.S. Food and Drug Administration (FDA). In effect, the agency sent Ocular Therapeutics a Complete Response Letter (CRL) regarding its resubmission of a New Drug Application (NDA) for Dextenza in the treatment of ocular pain following ophthalmic surgery.

The CRL stated that the FDA cannot approve the NDA in its present form.

Some of the sticking points were deficiencies in manufacturing processes and analytical testing related to manufacture of drug product for commercial production identified during a pre-NDA approval inspection in May 2017.

On July 10, 2017, Ocular Therapeutix submitted a response intended to close out all observations that were issued in the May inspection. The company also submitted details of a manufacturing equipment change in July as an amendment to the NDA resubmission and requested that this be considered a major amendment that would extend the target action date under the Prescription Drug User Fee Act (PDUFA).

[nativounit]

Despite these amendments, the CRL still went through. Actually, the CRL acknowledged receipt of the NDA amendment from July and stated that the amendment was not reviewed prior to the FDA’s action of the CRL.

A satisfactory resolution of the manufacturing deficiencies will be required before the NDA is approved. On the bright side, the FDA’s letter did not identify any efficacy or safety concerns with respect to the clinical data for Dextenza provided in the NDA nor any need for additional clinical trials for the NDA approval.

Amar Sawhney, Ph.D., Ocular Therapeutix president, chief executive and board chair, commented:

We are evaluating the FDA’s response and plan to work closely with the agency in an effort to satisfy the requirements related to the NDA. Importantly, there were no clinical issues identified in the CRL pertaining to efficacy or safety related to the post-surgical pain indication. We believe that DEXTENZA can be approved once these open manufacturing items are resolved.

Shares of Ocular Therapeutix were down more than 25% at $5.65 early Wednesday, with a consensus analyst price target of $22.25 and a 52-week range of $4.04 to $11.91.

[wallst_email_signup]

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.