Ocular Therapeutix Inc: Differentiated Long-Acting Retina Therapy Approaching Market - Initiate at Buy

We initiate coverage of Ocular Therapeutix (OCUL) with a Buy rating and $14 PT. We believe lead asset Axpaxli is a differentiated long-acting retinal therapy with the potential to unlock substantial value in patient populations where extended treatment durability is particularly important (potential $20B US TAM). We model a $3.3B total 2035 sales forecast versus Street expectations of $2.9B. In a recent Phase 3 trial in wet age-related macular degeneration (wAMD), Axpaxli demonstrated superiority to a single dose of Eylea and potential for less frequent injections in patients. While approvability remains debated, we see a credible regulatory path forward. The delay of the second Phase 3 wAMD trial (SOL-R) readout to 2028 means investors can concentrate on regulatory updates and the next retina indication readout in 1H27. Despite strong recent data from KOD, we remain confident in Axpaxli's opportunity and believe recent setbacks from a TKI competitor enhance its competitive positioning