Sticking With This Ocular Therapeutix Price Target as Key Treatment Moves Forward
The small-cap healthcare firm offered some encouraging earnings results.
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On Monday morning, portfolio holding Ocular Therapeutix (OCUL) released the firm’s second quarter financial results. For the period ended June 30, Ocular posted a GAAP EPS of -$0.35 on revenue of $13.48 million.
While that looks like a nasty loss per share and the top-line number was only “good” for year-over-year growth of 0.1%, both of those results beat Wall Street’s expectations.
Pravin U. Dugel, MD, who is president, CEO and executive chairman of Ocular, commented in the press release:
“We continue to execute with discipline, precision, and urgency to redefine the retina experience and make AXPAXLI available to patients as early as possible. Our June Investor Day marked a pivotal milestone with the announcement of a clear, FDA-aligned path to submit the AXPAXLI NDA for wet AMD in the fourth quarter of 2026. This approach is designed to support the fastest risk-mitigated path to NDA submission and review.”
Dugel added: “Consistent with the FDA Type C meeting minutes, the AXPAXLI NDA submission will be based on SOL-1 efficacy and safety data, interim safety data from SOL-R and supporting confirmatory evidence, including axitinib’s established profile as a VEGFR inhibitor from more than a decade of clinical use since FDA approval for renal cell carcinoma. By pursuing the 505(b)(2) regulatory pathway, we believe the AXPAXLI NDA submission is strongly positioned to benefit from a review timeline up to 60 days shorter than the typical new molecular entity.”
News
- FDA Type C meeting minutes formalize SOL-1 trial with confirmatory evidence as sufficient to support submission of AXPAXLI NDA in wet AMD
- AXPAXLI NDA submission to be based on SOL-1 week 52 efficacy and safety data, interim SOL-R safety data and confirmatory evidence
- Pre-NDA meeting scheduled with FDA in Q3 2026 with the NDA submission to follow the Section 505(b)(2) pathway which could accelerate the review timeline by up to 60 days
- New Post Hoc SOL-1 analysis demonstrates up to an estimated 72% reduction in treatment burden over 60 weeks with AXPAXLI as compared to a projected on-label aflibercept (2 mg) dosing schedule of every eight weeks
- Commercial readiness accelerating ahead of a potential 2027 launch
Fundamentals
For the period, Ocular Therapeutix generated net revenue of $13.475 million while compiling $95.584 million in costs and operating expenses. This left a GAAP operating income/loss of -$82.109M (down from -$67.641 million). After accounting for interest, and other income as well as other expenses, the firm’s GAAP net income/loss printed at $78.763 million or -$0.35 per share, up from -$0.39 for the year-ago comparison.
Turning to the balance sheet, Ocular ended the quarter with a cash position of $598.641 million and inventories of $3.826 million. That put current assets at $644.427 million. Current liabilities add up to just $49.174 million with no short-term debt. This leaves Ocular with current and quick ratios of 13.15 and 13.06. The implication would be that Ocular’s current financial position is well beyond simply being sound. The firm can weather a couple of years of cash burn at this pace.
Total assets amount to $671.317 million. There is nothing intangible on the books, which we appreciate. Total liabilities less equity comes to $151.276 million. This does include long-term debt of $72.795 million, which is something that the firm could take care of out of pocket more than eight times over, there is also an entry for deferred revenue of $14 million, which is not necessarily a true financial obligation. This is an outstanding balance sheet, especially for a firm presently burning cash.
Opinion
I am not disappointed with the results. They are better than what we were looking for. The balance sheet is in excellent condition. I am happy with that as well. The stock is holding its own on Monday morning when it probably should be doing a little better given the acceleration for the potential commercialization for the AXPAXLI product. The problem? The firm held no post-earnings conference call. This begs the question: why not? That kind of bothers me too. Otherwise, I don’t see anything I do not like. The firm has stated that earnings calls will resume next quarter. Am I to assume that there will be something positive to say next quarter? Odd.
Readers will see that OCUL appears to be stabilizing after selling off in the wake of a rising-wedge pattern of bearish reversal that ran into mid-July. That came after a spate of upside volatility following the closing of a triangle pattern. Relative strength is weak but not oversold. The daily MACD appears to still be posted quite bearishly but has perhaps seen the worst.
Backing up that concept, there is a possibility that these shares are about halfway into the development of a cup or cup-with-handle pattern. Both of those would create bullish setups. Our last trade in this name was an equity sale at $9.05 back on July 21. I would have no problem buying back a few of those shares on Monday morning. The portfolio reiterates its $11 target price.
Upcoming Portfolio Earnings
Inseego Corp (INSG): After the closing bell on Wednesday, August 5. Expected: Adjusted EPS of -$0.12 on revenue of $39.91 million.
Alto Ingredients (ALTO): After the closing bell on Wednesday, August 5. Expected: Adjusted EPS of $0.09 on revenue of $231.22 million.
Rocket Lab (RKLB): After the closing bell on Monday, August 10. Expected: Adjusted EPS of -$0.05 on revenue of $231 million.
Rackspace Technology (RXT): Ahead of the opening bell on Tuesday, August 11. Expected: GAAP EPS of -$0.09 on revenue of $646 million.
Ondas Inc (ONDS): Ahead of the opening bell on Thursday, August 13. Expected: Adjusted EPS of -$0.07 on revenue of $68 million.
Friday’s Intentions vs Actual Trades
Intention: Purchase 25 shares of ALTO at or close to the last sale of $4.68
Actual trade: Bought 25 shares of ALTO at $4.65.
Intention: Purchase 15 shares of (VELO) at or close to the last sale of $10.20
Actual trade: Bought 15 shares of VELO at $9.88
Intention: Purchase 2 shares of (RKLB) at $61.50 or better
Actual trade: Nothing done
Monday’s Intentions
Purchase 15 shares of OCUL at or close to the last sale of $8.25.
Current Positions
Long 225 shares of ALTO at $5.2821. Target price: $8. Last sale: $4.84.
Long 80 shares of (EVLV) at $5.8959. Target price: $8.50. Last sale: $5.53.
Long 40 shares of INSG at $7.7563. Target price: $11. Last sale: $7.11.
Long 100 shares of OCUL at $8.3569. Target price: $11. Last sale: $8.25.
Short one OCUL $11 September 18 call at $1.65, Last sale: $0.50.
Long 250 shares of ONDS at $8.4266. Target price: $14. Last sale: $7.47.
Long 50 shares of (PL) at $24.4758. Target price: $46. Last sale: $20.42.
Long 4 shares of RKLB at $66.505. Target price: $98. Last sale: $64.44.
Long 100 shares of (RXT) at $4.886. No target price. Last sale: $4.13.
Long 100 shares of (SOFI) at $15.7153. Target price: $24. Last sale: $16.45.
Long 30 shares of (SWBI) at $15.74. Target price: $19. Last sale: $14.61.
Long 115 shares of VELO at $12.1201. Target price: $18. Right Now. Last sale: $10.11.
Cash: $408.67.
Portfolio value: $9,806.08, -1.9% from inception on March 24.
At the time of publication, Guilfoyle was long ALTO, EVLV, INSG, OCUL, ONDS, PL, RKLB, RXT, SOFI, SWBI and VELO.
