EYPT - Shorting EyePoint Pharmaceuticals Ahead Of Davio-2 Wet-AMD Data: Potential 78% Gain

2023-11-30 16:39:16 ET

Summary

• EyePoint Pharmaceuticals, Inc. is expected to release Phase 2 data for its product candidate EYP-1901 in treating wet-AMD in December.
• The Phase 2 data suggests that the study may fail, with a difference in BCVA between EYP-1901 and control Eylea of >4 letters.
• The options market is implying a movement of +/- 78% in either direction, and the chart looks bearish.

EyePoint Pharmaceuticals, Inc. ( EYPT ) is expected to release Phase 2 data for the Davio-2 trial for its product candidate EYP-1901 in treating wet-AMD (age-related macular degeneration) in December. EYP-1901 is an intravitreal bio-erodible insert for Vorolanib. This tyrosine kinase inhibitor is being developed to treat retinal indications like wet AMD, non-proliferative diabetic retinopathy, and diabetic macular edema.

Phase 1 data for EYP-1901 showed safety. Phase 2 Davio-2 trial compares EYP-1901 to the standard-of-care blockbuster drug Eylea. The treatment arm has two doses, 2 mg and 3 mg. The treatment duration is up to 32 weeks. The primary endpoint is BCVA (blended) change at 28 and 32 weeks.

I analyzed the Phase 2 data for EYP-1901. The change in BCVA at 28 weeks is -0.4 letters from the baseline.

In the Phase 3 trial for Eylea (2 mg q8 weeks), the change in the BCVA was 6.5 letters when averaged at 28 weeks and 32 weeks from the baseline.

According to the company data from the investor presentation, a difference in BCVA between EYP-1901 and control Eylea averaged at 28 weeks and 32 weeks of >4 letters will be considered a failure. While cross-trial comparisons are not advised, the data available so far (as mentioned above) suggests that the two study arms will show a difference of >4 letters at the suggested follow-up period, thus implying that the study will fail.

December options imply a movement of +/- 78% in either direction. The current stock price is $6.52 (implied price range of $1.30 to $11).

The EyePoint Pharmaceuticals, Inc. chart looks bearish, there is a high short interest, and the options market depth is bearish.

I am leaning towards a bearish outcome of this trial and have a bearish position through EyePoint Pharmaceuticals, Inc. stock or derivatives.

A detailed strategy was discussed with the members of the premium service.

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Risks:

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