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EYEG: Raising Target on positive pipeline progress


By Beth Senko, CFA



We are raising our target valuation for EyeGate Pharmaceuticals (NASDAQ:EYEG) from $12.00 to $15.00 based on solid progress in its existing pipeline and the introduction of a new candidate for treating bacterial conjunctivitis.

Since early 2019, the Company focused all its efforts on its OBG (Ocular Bandage Gel) platform technology. The Company has completed four clinical trials for OBG, three for PRK and one for PE (punctate epitheliopathies).

EyeGate filed its IDE for OBG in corneal wound repair post photorefractive keratectomy (PRK) surgery in May 2019 and began its pivotal trial in June that year. In November and December, the Company received top-line data showing superiority in its primary endpoint of superiority in wound healing over standard-of-care a bandage contact lens (BCL). In the study, by day 3, 80% of study eyes receiving OBG were completely healed, compared with 67% in the control group.

In June 2020, EYEG received positive feedback from the FDA on its proposed packaging (a unique multi-dose bottle) and asked for several additional tests on the bottle. The Company expects to complete the tests and file a de novo application for OBG in PRK by the end of this year, with a decision in mid-2021.

A month later, EYEG received the go-ahead from the FDA for its pivotal study for using OBG in the treatment of punctate epitheliopathies (PEs) in dry eye. The Company expects to enroll patients in the first half of 2021. Top-line data is anticipated in the second half of 2021 and will be part of the de novo filing planned for later that year.

Finally, following a meeting with the FDA in August, EYEG announced plans for an IND for OBG in the treatment of bacterial conjunctivitis. The product, Moxigel, combines EYEG’s OBG technology with moxifloxacin, an antibiotic. The IND filing requires a short (28-day) toxicity study and the Company expects to file its IND in the first half of 2021. Once the IND is approved, the Company is expected to proceed with two clinical studies, beginning in the second half of 2021.

Based on the Company’s positive progress, we are raising our valuation from $12.00 to $15.00 based on a 10-year DCF with terminal market shares of 15-20% in the US for both its PRK and PE products, 20% royalties, 10% discount rate, 20% terminal EBIT margin, 25% tax rate and $6 million in net cash.

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