EyePoint Stock Sinks Below $1 After Key Eye Drug Fails and Staff Is Slashed. Will a Strategy Shift Save It?

EyePoint stock was heading for its largest single-day percentage drop on record. (Dreamstime)

Key Points

• EyePoint stock plunges after its drug candidate Duravyu fails to meet its primary endpoint in a Phase 3 study for wet macular degeneration.
• The biopharmaceutical company plans to cut about 53% of its workforce to help save approximately $30 million annually.
• EyePoint will shift its focus to treating diabetic macular edema, with final results from two Phase 3 trials expected late next year.

EyePoint stock is in trouble. But a shift in strategy following discouraging study results for its eye treatment candidate could offer some hope.

Shares of the clinical-stage biopharmaceutical company plummeted after management said it failed to achieve its primary endpoint in its trial and will cut over half its workforce.

EyePoint said Monday its main drug candidate, Duravyu, failed its second big Phase 3 study for wet age-related macular degeneration, an eye condition affecting older adults that causes rapid blurriness or a dark “blind spot” in the center of vision. While researchers found that patients’ vision improved, the drug wasn’t as effective at improving vision as the current standard treatment.

EyePoint stock plunged 82% to 53 cents in premarket trading Monday. Shares were heading for their lowest closing price and largest single-day percentage drop on record. Shares have cratered nearly 84% this year, according to Dow Jones Market Data.

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EyePoint’s Duravyu is an experimental, six-month dissolvable eye insert injected into the eye during a routine office visit. The treatment continuously releases medication that blocks blood vessel growth and inflammation. It aims to control retinal swelling and reduces the need for frequent eye injections for patients with severe vision threatening diseases.

But there was a silver lining. EyePoint said the drug was safe, controlled eye fluid well, and allowed over 50% of patients to go more than a year without needing extra eye injections, which meant it successfully reduced how often patients need treatments.

The company now will shift its focus to treating diabetic macular edema, a different eye condition in which Duravyu’s ability to reduce both swelling and inflammation has shown strong success in earlier trials.

Following the disappointing results, EyePoint announced it would cut about 53% of its employees beginning in the fourth quarter this year and wrapping up in the first half of 2027. The company expects the restructuring efforts to help save about $30 million annually.

Wall Street has split views on EyePoint. Of the 13 analysts covering the stock, 54% recommend buying shares while 46% have a Hold rating, according to FactSet.

Currently, EyePoint is currently conducting two new Phase 3 trials for diabetic macular edema with final results expected late next year.

Write to Mariapaula Gonzalez at mariapaula.gonzalez@barrons.com

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