The combination of small cap biotech and upcoming clinical trial results is a potent one for investors, although it is fraught with risk. Should the outcome miss the target, the shares will be offloaded faster than you can say phase 1. However, deliver the goods and the rewards are plentiful.
Investors of Clearside Biomedical (CLSD) were sitting on the right side of this equation on Tuesday. Shares of the eye disease-focused company took off by 38% after the company announced positive clinical results for CLS-AX, the company’s therapy for wet AMD (age-related macular degeneration).
Specifically, in the phase 1/2a OASIS study, data from the first cohort showed the drug was safe while indicating early signs of efficacy.
The company announced the trial will now move forward to cohort 2, a study which should be completed by the end of the year.
“The initial clinical evaluation of CLS-AX is encouraging,” said Needham’s Serge Belanger, ”With safety results supporting progression to Cohort-2, and an early promising efficacy results in difficult-to-treat wAMD patients.”
That said, the analyst highlights the results are only from 6 patients and the next groups will test doses 3.3x and 10x higher than the first cohort (the dose here was 0.03mg) and will provide a better overall picture on the doses that will most probably be advanced to the phase 2 and phase 3 clinical studies of CLS-AX.
Wet AMD is a medical condition which can lead to blurred or lack of vision in the middle of the visual field and given CLS-AX’s huge potential to address “key unmet needs” in retinal disease treatments, Belanger views the drug as CLSD's most important program “in terms of creating shareholder value.”
“Higher dose cohorts of the OASIS trial (Cohort-2 results by YE2021) have the potential to begin a significant de-risk of the CLS-AX retinal disease program,” the analyst summed up.
For now, however, Belanger remains on the sidelines with a Hold rating and has no fixed price target for the shares in mind. (To watch Belanger’s track record, click here)
The Needham analyst, however, is in a cohort of one, when assessing Clearside’s trajectory. All 3 other recent reviews are to Buy, culminating in a Strong Buy consensus rating. Even after Tuesday’s surge, the average price target indicates plenty of upside is in store. At $8, the figure suggests shares will be changing hands for a 94% premium a year from now. (See CLSD stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.