BURP'S PLACE!

[runncoach]

OHRP. This one might be worth looking at with results due from their study due in January. Of course all these small cap bios are risky but IMO there a significant risk/reward to play. Was better before the stock spiked up this morning lol. Anyway here is some of Roth's latest coverage. If results are good, this will be a nice play. Nobody wants any more needles stuck in their eyes than they have to and these eye drops will cut down on the number of times that would have to happen. GLTA



Yasmeen Rahimi, Ph.D., [e-mail]
[phone]
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COMPANY NOTE | EQUITY RESEARCH | November 28, 2017


Healthcare: Biotechnology
For full report in pdf, please click here

Ohr Pharmaceutical, Inc. | OHRP - $0.86 - NASDAQ | Buy
Company Update

Stock Data

52-Week Low - High
$0.56 - $2.90
Shares Out. (mil)
56.21
Mkt. Cap.(mil)
$48.3
3-Mo. Avg. Vol.
278,859
12-Mo.Price Target
$7.00
Cash (mil)
$18.1
Tot. Debt (mil)
$0.1



OHRP: Squalamine Remains Strong Wet-AMD Combo Player; Affirm Buy

With the announcement from Regeneron Pharmaceuticals (REGN-NC) yesterday that it will discontinue development of its REGN910 and Eylea combination therapy, we become more confident in the potential of squalamine. Squalamine is an easy to use non-invasive eye drop and has a novel mechanism of action that helps address a subgroup of patients largely ignored by anti-VEGF therapy alone. With that said, we affirm our Buy rating of OHRP.


Another combo trial bites the dust. Yesterday, Regeneron Pharmaceuticals Inc. (REGN-NC) announced its discontinuation of REGN910, an angiopoetin-2 antibody implicated in tumor and vascular endothelial anti-angiogenesis, and Eylea combo therapy for the treatment of diabetic macular edema (DME) and wet AMD. REGN explained it did not exhibit convincing efficacy over Eylea monotherapy in two Phase 2 trials, ONYX and RUBY. ONYX was a 365 wet-AMD subject trial and RUBY was a 304 DME subject trial, both testing for visual acuity baseline change measured by ETDRS score at 12 weeks. While the company did not reveal trial result details, it announced it will present them at an upcoming medical conference.
Squalamine: Non-invasive with novel MOA. Recall that the predominant method to treat wet AMD currently is anti VEGF-A, a monoclonal antibody that inhibits anti-vascular endothelial growth factor (VEGF). In our view, anti-VEGF therapy can carry significant burden because: it requires monthly injections, involving a regulated schedule difficult for both patients and physicians to maintain; it can be financially burdensome; and patients with occult CNV are often resistant to anti-VEGF. In our opinion, squalamine by OHRP, intended as a combination therapy with anti-VEGF injections, addresses these points. It is a simple non-invasive eye drop that can help reduce the number of required doctor visits by increasing treatment efficacy per visit, and it has shown most profound benefits in occult CNV <10mm2 patients. Squalamine has a novel MOA upstream of the VEGF pathway and modulates anti-angiogenic activity intra- and extra-cellularly by calmodulin-binding. Thus, Squalamine plus anti-VEGF presents a two-pronged approach to better address the subgroup of patients largely left out with anti-VEGF therapy alone.
Key binary event is MAKO Phase 3 top-line results in early January. OHRP's Phase 3 MAKO study tests for squalamine and Lucentis combo therapy in 200 wet-AMD subjects. Primary endpoint is BCVA at nine months in classic or occult CNV <10mm2. We believe the results will be positive, due to the strategic identification of the patient subgroup most likely to gain greatest therapeutic advantages, based upon its Phase 2 results.
Intraday price $0.82 as of 9:37 am ET.


Important Disclosures & Regulation AC Certification(s) are located on the last page of this report.


SUMMARY


VALUATION
Our $7 price target is derived from a risk-adjusted net present value (rNPV) analysis, based on 1) $4 per share, driven by U.S. sales of squalamine in wet-AMD (2021 launch, 40% POS, $1.1BB peak sales); 2) $3 per share, driven by U.S. sales of squalamine in wet-AMD (2022 launch, 40% POS, $1.27B peak sales). Specifially, we arrive at our $2.37B sales for squalamine in the U.S. and EU in 2028 based on the following assumptions: 1) There are approximately ~1.16M and ~2.14M adults with wet-AMD in the U.S., respectively, with 200k newly diagnosed cases every year; 2) We assume ~50% of patients treated with anti-VEGF therapies do not achieve functional visual acuity of 20/40; 3) We assume a U.S. and EU launch of 2021 in 0.35% of patients with NASH growing to 15% in 2028; 3) We model $10,000 annuals cost for squalamine in the U.S. and $7,000 annual cost in EU with a gross-to-net adjustment of 15%. We take our model out to 2028 and use a discount rate of 14%. As of June 30, 2017, OHRP had $18.1M cash on its balance sheet, sufficient to fund operations through MAKO data readout in early 2018, in our view. Factors that could impede Ohr's ability to reach out our price target include, but are not limited to: negative Phase 3 MAKO results, inability to gain regulatory approval, failure to obtain a commercial partner, and inability to obtain financing to fund operations.


RISKS
Clinical Risk. Success of a previous trial does not guarantee success in a future trial. Thus, results based upon Phase 2 development may not accurately predict Phase 3 outcome. Although the company has identified a more specific patient population to target for its Phase 3 MAKO study based upon itspost hoc analyses from Phase 2, this does not guarantee succcessful outcome for MAKO.
Regulatory Risk. Like all pharmaceutical developments, Squalamine will also face heavy governmental regulation, and the drug may not attain approval based upon safety and efficacy data, which will largely be based upon the data readout from the Phase 3 MAKO study. Additionally, its dependence on a third party manufacturer in the production of Squalamine makes the company subject to additional regulatory risk, as the third party manufacturer must pass pre-approval plant inspections.
Commercial Risk. Squalamine is Ohr Pharmaceutical’s leading therapeutic in its pipeline, and the company has not previously commercialized and marketed a product. Although it hopes to partner with a larger company with greater experience in these areas, this partnership may not necessarily be achieved. The company also faces significant competition against both large pharmaceutical companies and smaller ones that are partnering with other large companies and/or organizations. Lucrative opportunities for commercialization and marketing are reduced with greater competition, and Ohr Pharmaceutical’s Squalamine could become outdated and more costly against competitors’ products. We also point out that with the presumed exit of the United Kingdom, which has a significant AMD population, from the EU, business opportunities in the UK may be negatively impacted.
Financial Risk. Since the company’s inception, it has experienced significant net losses, with net losses expected over the next several years. The company has no commercialized product currently, and needs to raise substantial capital to continue clinical development of Squalamine in wet-AMD. Its current strategy is to develop a strategic partnership with a larger pharmaceutical company with more extensive experience in commercialization and marketing of ophthalmology products. Given that this is a crowded field, it faces significant competition in the development of a strategic partnership.


COMPANY DESCRIPTION
Ohr Pharmaceuticals, Inc. is a pharmaceutical company focused on the development of novel therapeutics and delivery technologies for the treatment of ocular diseases. The company's lead asset is squalamine (formerly known as OHR-102), an eye drop with a novel anti-angiogenic effect for the treatment of wet AMD, a the leading cause of vision loss in the elderly. It is estimated that over 1.75M Americans suffer from this disease with approximately 200,000 new cases diagnosed annually. Currently, squalamine is being evaluated in a Phase 3 MAKO trial in 200 patients with newly diagnosed wet-AMD and results are expected in early January. Furthermore, OHRP is equipped with a robust preclinical pipeline that consists of sustained release therapeutics for ocular diseases utilizing the company's patented micro fabrication platform technology. Several active molecules using this proprietary technology are being evaluated for ocular indications, such as primary open angle glaucoma, steroid induced glaucoma, ocular allergies, and retinal diseases. The company is headquartered in New York City.


Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures:

ROTH makes a market in shares of Ohr Pharmaceutical, Inc. and as such, buys and sells from customers on a principal basis.

Shares of Ohr Pharmaceutical, Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.