Ophthotech Corp (NASDAQ:OPHT) Is An Opportunity To Get In At A Discount On An Oversell

Ophthotech Corp (NASDAQ:OPHT) took a real hit early this week. The company put out data from two of its lead trials, and the data demonstrated that the drug had missed its endpoint in both trials. On the news, the company collapsed – and we mean collapsed – from circa $40 a share to around $5 a share, a close to 90% dip.Here's our thoughts: yes, the data is disappointing, and yes, it's a real blow for the company. The market it is targeting, wet age-related macular degeneration (AMD), is very large, and a shot at commercialization in the space would be a great value driver for a company of Ophthotech's size, even pre-collapse. However, that this drug didn’t hit on its endpoints in this effort is far from a death knoll, and there remains a wider pipeline that provides value in – we believe – excess of that which the current price per share infers.In turn, we think that at its current price there's an opportunity to get in at a discounted exposure to this wider pipeline on the oversold market response to the data drop, and draw some short term benefit as the market realigns towards a more accurately representative valuation.Here's what we're looking at.For those not familiar with the company, it's developing a drug called Fovista, and it's targeting the above mentioned wet AMD indication. Wet AMD is the leading cause of blindness in the US, and it affects up to 40% of the over 65 population in North America. That it's the leading cause of blindness in the US, and affects that many people, highlights the fact that there's currently a huge unmet need for a decisive treatment. In patients with wet AMD, the macula, which is a region in the retina of the eye (which is in turn the area responsible for light sensitivity) deteriorates.The drug is what's called an anti-platelet-derived growth factor agent (anti-PDGF), designed to work as a combination treatment with current SOCs in the space. The MOA is pretty neat. Current SOC's (such as the Lucentis with which Fovista was paired in the just failed trials) are what are called anti-VEGF treatments. They work well, but over time (and long term treatment is generally required) they become less effective. Why? Because chronic anti-VEGF treatment induces PDGF, which regulates something called pericytes, which are the cells associated with the walls of newly formed small blood vessels. Increased pericyte count basically hides the macula from the anti-VEGF treatment, so it doesn’t work as well. By inhibiting the formation of these pericytes, Fovista aims to strip them from the macula and give the anti-VEGF a bigger target to go at.Now, when the company put Fovista in combination with Lucentis, which is a Roche Holding Ltd. (ADR) (OTCMKTS:RHHBY) drug, it doesn’t seem to have had the desired effect. Exactly why, is unclear. In a phase II trial in the same combination, it worked extremely well.This leads us to believe that the miss is not cause to write off the combination therapy entirely. The science is sound, and there's a wealth of data to suggest that anti-VEGF and anti-PDGF works better together, when compared to anti-VEGF alone.Which brings us to another ongoing phase III trial, investigating the drug in combination with Avastin or Eylea. Avastin is an oncology approved drug, but its also used off-label in the wet AMD space. Eylea is approved for wet AMD. Both are anti-VEGF, and both should (if we're going off the wealth of legacy data leading up to the above mentioned phase II, as opposed to the just released phase III) then Fovista should improve their efficacy in wet AMD patients.Data is set to hit for both combinations during the second half of 2017.We will be updating our subscribers as soon as we know more. For the latest updates on OPHT, sign up below!Disclosure: We have no position in OPHT and have not been compensated for this article.