EyePoint is in crisis after its lead eye drug failed a primary trial goal, forcing the clinical-stage biopharmaceutical to slash its workforce in half and crashing the stock.
On Monday, after EyePoint announced the test results, shares plunged an astounding 82% to 52 cents -- an all-time low. The stock is on track for its lowest closing price and largest single-day percentage drop on record, according to Dow Jones Market Data.
EyePoint's main drug candidate, Duravyu, failed its second big Phase 3 study for wet age-related macular degeneration, an eye condition affecting older adults that causes rapid blurriness or a dark "blind spot" in the center of vision.
Duravyu -- the treatment is a six-month dissolvable eye insert injected during an office visit -- did improve patients' vision, but not as much as the current standard treatment, researchers found.
The trial, however, did find that Duravyu was safe, controlled eye fluid well, and allowed over 50% of patients to go more than a year without needing extra eye injections, which meant it successfully reduced how often patients need treatments.
Nonetheless, EyePoint said it would end its wet AMD trials and cut about 53% of its employees -- more than 100 of its roughly 215 workers -- by early next year. The company expects these restructuring efforts to help save about $30 million annually.
Also, EyePoint said it would using Duravyu from treating macular degeneration to treating diabetic macular edema. Earlier trials have shown that Duravyu reduces both swelling and inflammation in patients with diabetic macular edema.
EyePoint is conducting two new Phase 3 trials for diabetic macular edema with final results expected late next year.
Despite the shift, Jefferies analyst Faisal Khurshid has lost his confidence in EyePoint. He downgraded the stock to Hold from Buy and cut his price target to $1 from $8.
"It's going to be a tough path to recovery," he told Barron's.
Wall Street has split views on the company. Of the 13 analysts, 54% rate the stock Buy and 46% have a Hold rating, according to FactSet.
EyePoint is currently conducting two new Phase 3 trials for diabetic macular edema with final results expected late next year.
Khurshid said the new studies represent a "clear shot" at a comeback, but he doesn't expect EyePoint to catch a break because of the macular degeneration trial results.
"The likelihood of success for that readout is pretty debatable," Khurshid said. "The reason being is that after these two failures in wet AMD, it does put a cloud over how efficacious this drug is."
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