Roth starts Inotek Pharma at buy

Roth Capital Partners initiated coverage of Inotek Pharmaceuticals (NASDAQ:ITEK) with a “buy” rating and $10 price target. The stock closed at $6.40 on Nov. 30.

“In our opinion, Inotek's trabodenoson has the potential to become the go-to adjunctive therapy for glaucoma patients who are uncontrolled with or cannot tolerate prostaglandins (current first-line therapy), potentially capturing a significant portion of second-line prescriptions,” writes analyst Sa’ar Yaniv.

“Follow-on fixed-dose combination with prostaglandins could become a first-line option,” he added. 

Mr. Yaniv expects approval of trabodenoson as a monotherapy by 2019, and as a fixed-dose combination by 2021, with combined peak sales of $750-million by 2026.

In Phase 2 testing, trabodenoson significantly decreased intraocular pressure in patients with primary open angle glaucoma or ocular hypertension. While efficacy was not as robust as prostaglandins or beta-blockers (second-line therapy), Mr. Yaniv said the study demonstrated few side effects, tolerability issues, or adverse events, which often cause many patients to discontinue treatment with prostaglandins.

In an ongoing Phase 3 trial comparing trabodenoson to placebo, not to an active comparator, he said the company has a buy-in from the FDA for the study design and for using placebo as a comparator and timolol as an active control to ensure integrity of the study.