NEW BULLISH Plays
Ocular Therapeutix - OCUL - close: 43.27 change: +0.93
Stop Loss: 41.25
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Entry on March -- at $---.--
Listed on March 24, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 134 thousand
New Positions: Yes, see below
Why We Like It:
Investors seem to be in love with biotech stocks. One biotech that has definitely captured traders attention is OCUL. The company became public in July 2014 with five million shares at $13.00. Today there are 21 million shares outstanding and about 7.8 million in the float.
If you're not familiar with OCUL the company describes itself as,
"Ocular Therapeutix, Inc. is a biopharmaceutical company focused on the development and commercialization of innovative therapies for diseases and conditions of the eye using its proprietary hydrogel platform technology. Ocular Therapeutix's lead product candidates are in Phase 3 clinical development for post-surgical ocular inflammation and pain, and Phase 2 clinical development for glaucoma, allergic conjunctivitis, and inflammatory dry eye disease. The Company is also evaluating sustained-release injectable anti-VEGF drug depots for back-of-the-eye diseases. Ocular Therapeutix's first product, ReSureÂ® Sealant, is FDA-approved to seal corneal incisions following cataract surgery."
It would appear that the excitement driving OCUL's stock higher (from $13 to $43 in the last five months) is the company's OTX-DP product. They recently announced positive topline Phase 3a clinical trial data on their sustained release dexamethasone (OTX-DP) for the treatment of ocular inflammation and pain after cataract surgery.
In the company's most recent earnings report management laid out the milestones they plan to achieve this year. They include:
- Completion of the Phase 3b clinical trial of OTX-DP for the treatment of ocular inflammation and pain following cataract surgery, with topline results expected by the end March. This is the second of two Phase 3 clinical trials of OTX-DP for this indication
- Submission of a New Drug Application (NDA) for OTX-DP for the treatment of post-surgical ocular inflammation and pain anticipated in the second quarter of 2015.
- Advancement of feasibility work on the sustained delivery of anti-VEGF drugs in a hydrogel depot for the treatment of back-of-the-eye diseases, including wet age-related macular degeneration, expected in the first half of 2015.
- Completion of enrollment in the Phase 2b clinical trial evaluating OTX-TP for the treatment of glaucoma and ocular hypertension, with data expected in the fourth quarter of 2015.
- Initiation of Phase 3 clinical trials of OTX-DP for the treatment of allergic conjunctivitis expected in the middle of 2015.
- Completion of a Phase 2 exploratory clinical trial of OTX-DP for the treatment of inflammatory dry eye disease, with data expected in the fourth quarter of 2015
If OCUL fails to meet these milestones it could spark some serious selling in the stock. In the mean time the path of least resistance is higher. In the last 30 days the stock has seen two analyst firms raise their price target on OCUL into the $49-50 range.
Regular readers know that we consider biotech stocks to be higher-risk, more aggressive trades. The wrong headline can send a biotech stock crashing. Stop losses do not always work as intended. OCUL is a very small biotech company with a very small float and low volume. It definitely qualifies as higher-risk. We want to limit our risk by using small positions.
Technically OCUL has a bullish trend of higher lows. Shares look like they're about to break out from a two-week consolidation. The $44.00 mark is short-term resistance. We're suggesting a trigger to buy the stock at $44.15. (OCUL does not currently have options).
- Suggested Positions - *small positions to limit risk*
Buy OCUL stock @ $44.15