Ocular Therapeutix Spikes 45% On Drug News; Morgan Stanley Upgraded Co. To Overweight

Morgan Stanley upgraded Ocular Therapeutix Inc (NASDAQ: OCUL) from Equal-Weight to Overweight ahead of news for its drug OTX-TP and the discovery of a viable pathway forward. The firm maintained its $15 price target with an in-line industry view.

Analysts Andrew Berens and Thomas Smith wrote, "We are upgrading OCUL...after management announced a viable pathway forward appears to have a much lower bar than expected by investors...we expect OCUL shares to react favorably to the news."

Analysts gave one key takeaway from Ocular's announcement that can drive the company's share price higher.

Morgan Stanley noted that the FDA gave Ocular permission to conduct a Phase 3 program for OTX-TP in glaucoma patients. With the drug in Phase III clinical trials, Ocular has a chance to prove the drug's safety and efficacy on humans, one of the last regulatory hurdles before the drug can be marketed and sold. If the drug proves to be successful, Ocular can achieve significant revenue growth and profitability while filling the market's demand for a drug that treats glaucoma.

Shares of Ocular Therapeutics recently traded at $8.94, up 42.8 percent.