aerie + 15%
Aerie Pharmaceuticals (
AERI) jumped to a fresh high Wednesday after the Food and Drug Administration agreed the company's drug, Rhopressa, is effective in lowering eye pressure at the root of glaucoma.
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Autoplay: On | OffBut there was a caveat. After reviewing three Phase 3 studies, the FDA found Rhopressa given once daily is less effective compared with another drug called timolol ophthalmic solution, given twice daily.
Still investors didn't seem to mind the efficiency issue. In morning trading on the
stock market today, Aerie popped 16.8%, near 64.60, after earlier hitting a record high, up as much as 19% at 65.89.
The review was posted Wednesday, two days before a committee of experts is set to weigh the benefits and risks of Rhopressa and make a recommendation on approval to the full FDA. A committee is not required with every drug approval.
Canaccord analyst Dewey Steadman expects the committee to focus on incidences of conjunctival hyperemia and corneal verticillata. Conjunctival hyperemia is inflammation and discharge near the eye. Corneal verticillata is a whorl pattern on the eye that usually doesn't impact vision.
IBD'S TAKE: Aerie's IBD Relative Strength Rating recently climbed to 82 out of a best-possible 99. See what goes into ranking stocks by visiting IBD Data Stories.
FDA reviewers suggested Aerie also remove the wording on its label which had described incidences of hyperemia and cornea verticillata as "mild in nature." Aerie'a management had used the phrase to describe these side effects in earlier trials, Steadman said.
"While not ideal, we think Aerie's marketing program can still work around the hyperemia and verticillata issues with published data sets provided to prescribers," Steadman wrote in a note to clients.
Steadman expects Rhopressa to fair well at the meeting, setting the stage for potential approval in February, when the full FDA is scheduled to address the drug. He kept his buy rating and 65 price target on Aerie stock.
"With meaningful market potential and the ability to revolutionize glaucoma therapy, we continue to like the company and view Aerie as one of the best positioned names in our coverage universe," he wrote.
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