Iveric bio (NASDAQ:ISEE), a pharmaceutical maker that tends to focus on eye-related issues, shot up better than 8% yesterday following news from the FDA. The positive momentum carried on into this morning's trading session as the company added on another 3%. Financial analysts are also in favor of buying in on Iveric, and have been for nearly a year now.
The FDA Word That Gave ISEE Stock a Boost
The US Food and Drug Administration (FDA) supplied Iveric with a written agreement of a Special Protocol Assessment (SPA) connected to the overall design of upcoming testing Iveric is looking to start. The tests, known as GATHER2, are focused around the clinical trials of the company's Zimura drug. Zimura targets a condition known as “geographic atrophy (GA) secondary to age-related macular degeneration.” Macular degeneration, meanwhile, is a change in vision that gradually blurs vision, targeting the macula, or the part of the eye that creates the sharpest vision.
With the FDA nod in hand, Iveric can start enrolling test subjects, which it expects to complete later this month. The testing will then begin, and Iveric looks to have topline data to be available sometime in the second half of next year. The company will need one year from the time of the last enrollee, plus some additional time to lock and analyze the database of results accordingly.
GATHER2 is said to be similar to GATHER1, the company's earlier testing. When complete, the two GATHER studies should ultimately support a New Drug Application (NDA) study that would ultimately produce treatment options for the condition in question.
What Are Financial Analysts Saying About Iveric Bio Stock?
The good news about Iveric bio stock, based on our latest research of financial analysts, is that analysts have been bullish about it since August 2020, with a consensus “buy” rating. The only real downside is that there are very few analysts talking about it.
A year ago, ISEE stock had one “buy” rating and two “hold” ratings. Six months ago, that completely shifted, going to two “buy” ratings and one “hold”. Today, meanwhile, we are down to one “buy” rating.
That “buy” rating is currently held by Credit Suisse, who just yesterday raised its price target on the company from $14 to $16 per share. With Iveric seen trading around the $9 mark today, that's a substantial potential upside.
Some investors have expressed concern recently about Iveric's cash burn rate. This concern has some validity; with the GATHER2 study set to take at least another year before the company can even consider putting the Zimura drug on the market, the company will have to rely on stores and stock value for a while. However, closer analysis suggests that this may not be much of a problem, if GATHER2 turns out well.
Reports note that Iveric had $180 million in cash on hand as of March 2021, and had no debt. This would give it a so-called “cash runway” of about 2.3 years, meaning that, even if the company makes no money at all, it won't run out of cash until around the middle of 2023. If it can produce solid results from the GATHER2 testing, meanwhile, that's likely to improve as it would likely have a macular degeneration drug to take to market, a point which it could use in further fundraising. The company's cash burn rate was seen increasing in the last year, though; the cash burn rate increased 52% over that time. An increased cash burn rate can be a concern, but given that the cash burn—at last report pegged at $78 million—is only about 12% of its total market capitalization, reports note, the odds of Iveric being able to raise further cash are in its favor.
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