In May, Ohr Pharmaceutical (OHRP) reported a loss of $3.4 million. As with most unproven biotech companies, the firm is losing money, so the fundamentals aren’t there yet. However, the story is much bigger than the balance sheet. Ohr recently announced positive Phase-2 trials for the treatment of the wet form of age-related macular degeneration. In short, the therapy of wet-AMD could improve the visual acuity for people suffering with their eyesight.
Shares of Ohr Pharmaceutical have fallen from a 52-week peak of $12.31 that triggered in early March to a low of $2.02 earlier this month. The rebound back above $3 looks promising, although there is still risk of a drop to $2.
Shares were at $8.73 in late March and tanked to $2.74 following what was then disappointing data for its wet-AMD therapy.
One brokerage firm lowered its price target on Ohr Pharmaceutical from $25 to $15 following the news in March. Another outfit downgraded the stock to “Neutral” from “Buy” with an $8 price target. However, another brokerage firm reiterated its “Buy” rating and kept a $34 price target on the stock following the drop below $3.
In early April, it was reported that a company called Broadfin took a 6% passive stake in Ohr Pharmaceutical. Shares closed at $2.72 on the announcement.
On July 13, Ohr Pharmaceutical shares surged from $2.27 to close at $3.69 following updated news on its wet-AMD therapy. Volume exceeded 45 million shares. The stock reached $4.34 three days later before the recent pullback to $2.88.
The risk/reward setup looks compelling for Ohr Pharmaceutical shares at current levels around $3. There is only $1 of downside risk to support and a little over $3 overall, with the potential of a run to $8 or $30.
Buy OHR Pharmaceutical (OHRP) common stock at current levels.
While I would like to see a run to double-digits from current levels, I have set a more conservative price target of $6. I still consider this a shorter-term “trading” stock because the company is losing money, and I will protect profits if the position makes a double-digit gain. However, I hope this will be a longer-term position that returns triple digits.
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