Aerie Pharmaceuticals jumped into the IPO queue a few weeks ago to fund a push for a group of glaucoma drugs. But Lexington, MA-based Inotek Pharmaceuticals is showing Aerie isn’t the only small, privately held company looking to break into one of the biggest markets for prescription eye drugs.
Inotek has just raised a total of $21 million in equity and debt financing to help push a glaucoma drug known as trabodenoson through a mid-stage clinical trial. Inotek said all of its existing investors, including Devon Park Bioventures, Rho Ventures, Care Capital, Medimmune Investors, and Pitango Venture Capital, took part in the $14 million equity financing. Inotek also secured $7 million in venture debt from Horizon Technology Finance Corp. to help with the effort. Inotek’s executive VP and chief scientific officer William McVicar says that as part of the debt financing, Horizon, a new investor, will get warrants for a piece of equity in the company, should Inotek be sold.
With the new round of funding, Inotek has raised about $111 million from venture investors since inception, according to McVicar.
Inotek wants to find a niche in the market for glaucoma, a condition in which fluid builds up inside the eye and puts pressure on, and eventually damages, the optic nerve. This can cause patients to gradually lose their vision and eventually go blind if the condition isn’t treated.
Patients with glaucoma are usually prescribed eye drops known as prostaglandin analogues (PGAs), many of which are generic. They can also end up on one of several other classes of eye drops, such as beta blockers or adrenergic agonists, that are used to either boost the effects of PGAs or as an alternative therapy. All of these drugs work by either slowing down the eye’s rate of fluid production or helping fluid leave the eye through its main drain (the trabecular meshwork) or secondary drain (the uveoscleral pathway), which helps relieve the pressure building up in the eye.
But even while PGAs such as latanoprost—the most commonly prescribed of the group—help the eye drain itself, they don’t directly target the trabecular meshwork, the diseased tissue experts say is responsible for the fluid buildup.
Inotek is one of at least two companies—the other being Bedminster, NJ-based Aerie—creating a drug that does. (A third, Belgium-based Anakem Therapeutics, has an experimental drug in pre-clinical development.) Both Aerie and Inotek are trying to show that, at minimum, this approach can serve as an add-on therapy to PGAs like latanoprost (Xalatan), because beta blockers and others have more side effects than PGAs and typically require more than one dose per day. Aerie said in its S-1, for instance, that despite their limitations, non-PGA eye drops account for half the total glaucoma prescriptions filled in the U.S. and Europe.
Both Inotek and Aerie are targeting the trabecular meshwork with different approaches. Inotek’s experimental drug, trabodenoson, is supposed to spur enzymes within the trabecular meshwork to clear out the proteins that are clogging the drain, so to speak. Aerie’s drug candidate, AR-13324, is supposed to block two targets—one of which, the rho kinase, is implicated in fluid drainage.
“It’s good for the area that there are a couple of approaches being progressed,” McVicar says.
Even so, he contends that a few things separate Inotek from Aerie. First, he says, Inotek still thinks trabodenoson has a chance to be a monotherapy for glaucoma—something that would compete directly with PGAs and work by itself. Second, McVicar argues that AR-13324, as a monotherapy, appears to have a “mechanism linked side effect,” in that the more the dose has been increased in trials, the more patients have experienced hyperemia, or redness in the eyes. This, McVicar says, is why Aerie has changed the drug’s mechanism of action to hit two targets, rather than just the rho kinase alone.
Aerie, for its part, said in its S-1 that this effect has been “mild,” and that it’s a “common tolerability finding” associated with the most widely prescribed glaucoma drugs. Still, McVicar says this could give Inotek a leg up.
“It’s a little more difficult for them to say [they] can provide as much efficacy as [PGAs] because they may have to increase a dose too high, and that dose may be untenable,” he says.
That being said, Aerie’s drug has been dosed in patients once a day, while trabodenoson hasn’t. Though Inotek has claimed that trabodenoson is showing signs that it works better the longer patients take it—suggesting it could potentially be a once-a-day drop—the company doesn’t have the clinical evidence to back it up as of yet.
“We’re pretty confident that we’re going to get to once a day,” McVicar says, “[but] we haven’t proven it yet.”
That will be one of the things Inotek does in its new mid-stage study. It plans to see how the drug candidate works in tandem with latanoprost, and will dose groups of patients either once or twice per day. Aerie is a little ahead of Inotek—it is planning to kick off a late-stage clinical trial for AR-13324 in mid-2014. But Inotek hopes that by having sets of data for trabodenoson both as a monotherapy and a combination treatment, it’ll be ripe for either an IPO of its own, or a sale.
“I think that we’ll make that decision [of an IPO or sale] when we have that next chunk of data,” McVicar says. “My expectation is that we’ll be taken out.”