Wells Fargo analyst David Maris lowered his price target for Osmotica Pharmaceuticals to $14 from $17.50 following the company’s Q4 results. The stock in morning trading is down 38%, or $2.56, to $4.18. Osmotica used the Q4 results to report “mixed” results from its arbaclofen, or Ontinua, study, Maris tells investors in a research note. Arbaclofen did not demonstrate superiority to placebo as measured by the Clinical Global Impression of Change, but did demonstrate statistical significance in spasticity relative to placebo when using the Total Numeric modified Ashworth Scale, says Maris. He points out that Osmotica continues to advance RVL-1201 for blepharotosis, and remains on track to report results by mid-year. The analyst pushed out the Ontinua launch from 2020 to 2021 and reduced his sales estimates due to approvability risks. His 2023 sales forecast for Ontinua is now $60M, down from $120M previously. Maris keeps an Outperform rating on Osmotica. Though the Q4 earnings report was “disappointing” given the negative arbaclofen results, the company trades at less than seven times estimated 2019 enterprise value to EBITDA with positive cash flow, the analyst tells investors in a research note.
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