TD Cowen downgrades EyePoint stock to Hold on trial concerns

TD Cowen has lowered its rating on EyePoint Inc.'s stock (EYPT) to Hold from Buy, and reduced the price target from $20.00 to $4.00, in light of the failure of its first Phase III study for wAMD treatment. The stock is currently priced at $4.58, down 75% over the last six months. Nine analysts have lowered their earnings estimates for the upcoming period due to the failed study.

Analyst Tara Bancroft from TD Cowen highlighted that the LUGANO post-hoc analysis provided valuable insights, noting that the presence of nine patients might have been an unusual randomization scenario impacting the Duravyu arm. The firm estimated a -2.4 letter difference with a confidence interval lower bound of approximately 4 letters after removing about 4% of underperforming patients.

However, TD Cowen believes this improvement may not significantly boost expectations for LUCIA's success. The company also expressed uncertainty over regulatory acceptance of the post-hoc analysis, as there is no historical precedent in the ophthalmology division. TD Cowen cautions that long-term concerns exist with Duravyu as a potential wAMD maintenance therapy, with BCVA curves showing a decline in the most recent months, potentially worsening with prolonged follow-up.

EyePoint has faced multiple analyst downgrades following mixed results from the LUGANO Phase III trial, including recent ratings from Chardan as Neutral and RBC Capital as Sector Perform.