When I first established my position at $1, the stock carried clinical trial risk. The trial was very smartly designed, so I thought the probability of success was 80%+ (way better than most clinical stage life science cos).
The data reported a few days ago was solid. 98% approval odds now. Yet the stock opens up 40% and then gives it all back. What gives? From what I've heard, these are the concerns:
1. The trial proved something that was obvious: (a) bevacizumab is as effective as ranibizumab and (b) monthly dosing is better then quarterly dosing. Yes, these points were obvious! That's why I invested! The data are approvable and that's what I care about. The FDA doesn't award degree of difficulty points but there is 12 years of exclusivity.
2. Aflibercept is the best wAMD drug and will go off patent in 2023. Yes, the market will change. But the current market is $13B for wAMD and other applicable diseases. Baby boomers are retiring. Lytenava (the brand name for OTLK's bevacizumab) is intended to replace off label bevacizumab in the US (representing 50% of US patients) and Europe (about 1/3 of EU patients). They only need to get a portion of the off label market (even if the total market shrinks) to achieve $1B peak sales.
3. OTLK only has $37M cash. They will need more $$. Yeah. So? Doesn't every clinical stage company? This is an area I know a LOT about. It will not be a problem. But, one should always adjust market caps for these things. The current market cap is $380M, so add $120M and think of the company as currently worth $500M.
So, the question for investors: What's $1B in peak sales worth? $2B, $3B, $4B?
News 
Market Data 
Discover 
