During the middle of June, as part of our Biotech Catalyst series, we highlighted Ocular Therapeutix Inc (NASDAQ:OCUL) as a company to keep an eye on. The root of our highlighting this one was an upcoming PDUFA for Ocular's lead development asset, a drug called Dextenza, which the company has developed as (and is trying to get approved in) a target indication of the reduction of ocular pain, and specifically, pain following ophthalmic surgery.When we highlighted this one, the company was trading for just shy of $11 a piece. At last close (Friday) this had dipped to $7.12 and, premarket on Monday, further to $7 a share. All told, the company is down circa 27%.Surely, then, the catalyst we highlighted as being one to watch has hit press and done so unfavorably for Ocular? That's why the company has lost a quarter of its market capitalization overnight – right?Well, no.PDUFA for Dextenza isn’t until July 19. As we see so often at this end of the biotechnology space, however, journalists are ramping up their coverage of a company ahead of a binary event and said coverage is driving sentiment shifts – irrespective of the underlying circumstances.In this instance, it's our old friend Feuerstein that's moving markets, in his new role as Senior Biotech Writer at Stat.On July 6, Feuerstein published this piece, seemingly highlighting a new input that puts Ocular's chances of picking up approval for Dextenza in jeopardy. Specifically, he highlights the potential contamination of the drug with various contaminants, the most important of which (he suggests) is aluminum.At a glance, that seems like bad news. Damning, even. Get beyond the headline, however, which most won't be able to do because there's a convenient paywall on the article rooted in its 'Stat+' designation, and all isn’t as it seems.In short, Feuerstein has taken a page from a letter that Ocular received back in early Q2, called a Form 483. Form 483s are standard response forms issued by the FDA to a company that has submitted an NDA to the agency and they specifically relate to the manufacturing side of the submission. They aren’t good news, as they generally mean the agency has found some issues with the process. With that said, up to 90% of submissions receive one and the vast majority are able to resolve the issues with no problems.Back when the FDA first issued this form to Ocular, the company held a conference call. In response to the conference call, Cantor Fitzgerald published an updated valuation and forward thesis on the stock.Here was the takeaway from this update:
"We believe the items discussed on the call remain manageable and do not delay the current regulatory timeline."
In other words, no problem. Move ahead as normal.What Feuerstein has done with his latest piece is taken the same page of the form that both Ocular and Cantor reviewed back in May and rehashed it with a very questionably timed negative interpretation. There are no new inputs here. Markets have been aware of this concern for months and valued the company accordingly. Feuerstein is late to the party in highlighting this issue but – for some reason – the market has decided to interpret his (incorrect) analysis of the situation and sell off on Ocular.We're not saying that this isn’t a risky allocation ahead of PDUFA. The risk we outlined last time remains in place. It's a binary event that could play out unfavorably for the company and its shareholders.What we are saying, however, that nothing has changed between the start of last week and today. Well, that's not entirely correct, there's a good chance Stat+ subscriptions have spiked as investors scramble to see what insider information Feuerstein has been able to uncover to justify his headline (we'll save you the subscription price: the answer is none), but that's all.There is some good to come out of this, of course – the company is now available at a substantial discount to our first highlighting it ahead of PDUFA.Check out our previous coverage of this one here.We will be updating our subscribers as soon as we know more. For the latest updates on OCUL, sign up below!Image courtesy of Picturepest via FlickrDisclosure: We have no position in OCUL and have not been compensated for this article.
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