Ophthotech Eyes $85M IPO With Late-Stage Clinical Trial in Sight

8/15/13Follow @benthefidler

Fresh off a big financing round in May, Ophthotech is looking for more cash to run a big late-stage clinical trial for its eye drug, which it hopes to market as Fovista. And like a horde of other biotechs of late, it’s tapping the public markets to get it.

The New York-based biotech has filed a prospectus with the Securities and Exchange Commission outlining plans to raise up to $85 million from public investors through an IPO. The company aims to trade on the Nasdaq under the ticker symbol “OPHT.” The company is hanging its hat on a lead drug candidate for age-related macular degeneration, the leading cause of blindness in the elderly.

Novo A/S (28.65 percent) is Ophthotech’s largest stockholder, followed by SV Life Sciences (26.80 percent), HBM Healthcare Investments (15.21 percent), and Clarus Ventures (13.57 percent).

Morgan Stanley, J.P. Morgan Securities, Leerink Swann, and Stifel, Nicolaus & Co. are Ophthotech’s underwriters.

Ophthotech has raised just over $130 million in preferred equity financing since it was formed in 2007. Its last capital infusion came just over two months ago when investors led by Novo agreed to provide a $50 million Series C round. Novo also committed up to an additional $125 million to Ophthotech as part of a product royalty sale agreement, through which the biotech is providing Novo with a percentage royalty on future sales of its lead drug and getting a few big checks in return—as long as it hits certain developmental milestones. Ophthotech received about $42 million from Novo as part of this deal in May, according to the prospectus.

Ophthotech said at the time that the cash would be used to fund a large late-stage study of its drug candidate that it plans to begin later this year. The IPO dollars would add to that cash pile. Ophthotech aims to use the proceeds, as well as the other cash it has in the bank, to take that trial to the finish line, begin exploring other additional uses for the drug, and develop another drug candidate for the “wet” form of age-related macular degeneration that’s still in early-stage development.

Ophthotech was founded by former Eyetech Pharmaceuticals executives David Guyer and Samir Patel. The company has been developing of a drug it previously referred to as E10030, a treatment for the wet form of age-related macular degeneration (AMD), a condition in which abnormal blood vessels grow in the macula—a part of the retina—and leak behind the eye, leading to distorted vision and potential blindness.

The market for the wet form of AMD, of course, is highly competitive and fast evolving. The standard of care has been changing from laser therapies that merely stopped patients’ vision from getting worse while harming retinal tissue, to injectable pharmaceuticals that actually improve their condition. Roche/Genentech’s bevacizumab (Avastin) and ranibizumab (Lucentis), and Regeneron Pharmaceuticals’ aflibercept (Eylea) all dominate the market, but they all work by blocking the vascular endothelial growth factor (VEGF) that researchers believe causes the condition to worsen—which only stops those abnormal blood vessels from continuing to grow.

Opthotech’s drug blocks a different protein, platelet-derived growth factor (PDGF), which scientists believe may cause those blood vessels to recede when combining it with an anti-VEGF. The company’s plan is to combine the two treatments into one regimen of injections, hoping that its trials can prove that that combination works better than just taking aflibercept or ranibizumab, for example.

Ophthotech isn’t the only company trying this approach—Waltham, MA-based startup Kala Pharmaceuticals is also developing an anti-VEGF/anti-PDGF combination—but its candidate is the furthest along in development. Ophthotech has reported on what it says were encouraging results from a mid-stage clinical trial that looked at 449 patients over 24 weeks.

Still, Ophthotech has a lengthy, expensive task ahead of it. It hopes to start its late-stage clinical trial by the end of the year testing E10030 in combination with an anti-VEGF, have its first top-line data from that study in 2016, and, if things go well, submit applications for approval in the U.S. and Europe before the end of that year.

Ben Fidler is Xconomy's Deputy Biotechnology Editor. You can e-mail him at bfidler@xconomy.com Follow @benthefidler

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