An innovative potential treatment for hepatic encephalopathy created by Ocera Therapeutics, Inc. (NASDAQ: OCRX) is a unique product on an under-served market, and if clinical trials are successful, it could become a major source of success and profitability for the company, according to an Aegis Capital Corp. report (http://nnw.fm/cNkZ1) released on December 8. The report reiterates a ‘Buy’ rating for Ocera and recommends a higher stock price target of $8, compared to the $2.1 at the time of the analysis.
The Aegis report was released a day after Ocera announced completion of enrollment in its phase 2B trials for lead product candidate OCR-002 – an acute treatment for hepatic encephalopathy and hyperammonemia in patients with acute liver injury, acute liver failure and liver cirrhosis. The phase 2B study, called STOP-HE, will evaluate the safety, efficacy and tolerability of OCR-002 (Ornithine Phenylacetate) in hospitalized patients suffering from hepatic encephalopathy. The study enrolls a total of 230 subjects, which will be administered either OCR-002 or a placebo intravenously for five days. Based on their degree of liver impairment, patients will be given various doses of the drug, ranging from 10 to 20 grams over a 24-hour period.
Top-line data are due in the first quarter of 2017, which Aegis experts expect will be a share inflection point for the company. The study’s primary goal is to archive a meaningful clinical improvement in hepatic encephalopathy symptoms, so as to keep OCR-002 on track to potentially becoming a first-line, foundational therapy of choice for patients with this condition, on a market with significant unmet medical needs. Hepatic encephalopathy is a progressive complication of liver failure of cirrhosis which is marked by partial cognitive impairment including disorientation, confusion and impaired motor skills, while more severe forms can lead to coma and even the patient’s death.
According to the Agis report, there are currently only two hepatic encephalopathy products on the market, with others in development. Lactulose is a first-line therapy that has the largest market share at the moment, while Rifaximin is a second-line therapy. But Aegis analysts believe that OCR-002 has great potential and can take a significant market share, being unique in several respects: it has a unique mechanism of action as an ammonia scavenger, it is the only drug that can be administered intravenously and it has the potential to significantly shorten hospital stays.
If the phase 2B trial is successful, OCR-002 could reach approximately 170,000 patients that have hepatic encephalopathy and require hospitalization. Aegis analysts expect the therapy to achieve at least 22 percent market share and yield revenues of approximately $150 million. Ocera is also developing an oral formulation of the drug for chronic use, with the goal of preventing hepatic encephalopathy recurrences. The oral formulation was not included in the Aegis analysis, but it may indeed help provide an even larger share of the market.
As for potential risks for investors as identified in the report, these include typical manufacturing, commercialization, research and development, and regulatory risks that generally result from investing in pharmaceutical companies. The analysis also points out a series of specific risks of investing into Ocera, such as relying on the success of OCR-002, the company’s liquidity and high volatility.
For more information, visit the company’s website at www.ocerainc.com
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