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Regrouped Biotech's Stock Price Could See Fifteenfold Increase
Research Report

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A recent conference call provided clinical and financial updates.

IVF procedure

H.C. Wainwright & Co. analyst Andrew Fein shared his takeaways from this company's recent conference call, in which management provided clinical and financial updates.

In a March 16 research note, Andrew Fein, an analyst at H.C. Wainwright & Co., reported that OvaScience (OVAS:NASDAQ) shifted its focus back to research and development, after interim data from the first 20 patients in its Phase 1 trial of OvaPrime showed no signs of efficacy despite indicating safety and tolerability.

Consequently, instead of seeing that trial through, the company ended enrollment in it. Instead, it will conduct a Phase 1b/2a study that will use "an improved cell processing technique to hopefully improve efficacy," Fein noted. This is expected to start in H2/18.

Fein commented that such a course is common for a biotech firm that is developing breakthrough technology, specifically for it "to go through several rounds of technical iteration and optimization prior to bearing fruit." He added that OvaScience's continued preclinical efforts are "a positive step towards yielding proof-of-concept human data."

However, Fein highlighted the possibility that the next study, the Phase 1b/2a, could have a similar outcome as the Phase 1. "What is not clear to us is whether the low yield of eggs was the culprit in the lack of a robust efficacy signal" in the Phase 1 study, he explained. As such, it is uncertain that use of an enhanced cell processing method will yield different results.

Overall, however, management is taking the right approach, Fein concluded. "Importantly, we think the clinical update signals to us that the new management team is on the right track to execute the new vision as being science driven and laser focused on advancing the key programs with a leaner but more efficient organization."

As for OvaScience's most recent financials, revenue in Q4/17 was $0.09 million and in the full year of 2017 was $0.3 million. Net loss for Q4/17 was $8.53 million, and for 2017 it was $50.98 million. The company ended the year with $67.2 million in cash, cash equivalents and short-term investments.

OvaScience is currently trading at around $0.82 per share whereas H.C. Wainwright's target price on the company is $15, reflecting more than a fifteenfold potential increase. OvaScience is rated a Buy.

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Disclosures from H.C. Wainwright & Co., OvaScience Inc., First Take, Mar. 16, 2108

I, Andrew S. Fein and Li Wang Watsek, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.

None of the research analysts or the research analyst's household has a financial interest in the securities of OvaScience, Inc. (including, without limitation, any option, right, warrant, future, long or short position).

As of February 28, 2018 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of OvaScience, Inc.

Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.

The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.

The Firm or its affiliates did not receive compensation from OvaScience, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.

The Firm does not make a market in OvaScience, Inc. as of the date of this research report.




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