There’s a new FDA-approved dry eye treatment on the scene. On Tuesday, the U.S. regulators green-lighted Kala Pharmaceuticals’ (KALA) EYSUVIS 0.25% for the treatment of signs and symptoms of dry eye disease (DED).
The go ahead from the FDA makes EYSUVIS the first and only approved corticosteroid for this indication and comes several days ahead of the scheduled October 30 PDUFA. Wedbush analyst Liana Moussatos believes this reflects “both the strength of the regulatory data package” and the “unmet need in this patient population that suffers from a lack of rapid and adequate relief from dry eye flares.”
With a plan to increase the sales force from 56 reps to 125 in 2021 and exiting Q3 with $159 million of cash in the coffers – enough to last the company until 3Q22 – Moussatos believes the stage is set for Kala to realize the treatment’s potential.
Moussatos estimates dry eye affects 38 million Americans, of which 17 million have been diagnosed and are receiving treatment.
However, 90% of these patients are not presently on a prescription and the remaining 10% are given immunomodulatory agents such as RESTASIS®, CEQUA™, and XIIDRA® (roughly 7%) or off-label corticosteroids (roughly 3%).
“Consistent with our bullish outlook,” Moussatos concluded, “We view EYSUVIS™ as initially targeting the ~6M patients who are not currently on a prescription and yet complain about chronic flares during office visits (~40%).”
Accordingly, Moussatos reiterates an Outperform (i.e. Buy) rating on KALA shares, while increasing the price target from $39 to $47. What’s in it for investors? Enormous upside of 574%. (To watch Moussatos’ track record, click here)
While not quite as bullish as the Wedbush analyst, Moussatos’ colleagues see massive upside, too. The analysts’ average price target is $22.60 and implies potential upside of 224%. The stock has a Strong Buy consensus rating, based on 4 Buys and 1 Hold. (See KALA stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
