Ophthotech, Novartis Team up on $1B Deal for Eye Drug
Ophthotech has said for some time that it’s been looking for a partner to help with international sales of Fovista, its experimental drug for age-related macular degeneration in clinical trials. Today the location New York-based company is announcing that it has found such a partner in Novartis, and has cut a deal with Swiss pharma giant that could be worth over $1 billion when all is said and done.
Under the deal, Novartis is getting international rights to Ophthotech’s Fovista, which is designed to treat the “wet” form of AMD, in which abnormal blood vessels grow and leak fluid in the retina, causing distorted vision and potentially blindness. In return, the Swiss pharma giant is giving Ophthotech a $200 million up front, and potentially another $130 million when it finishes enrolling patients in the Phase 3 studies for Fovista. Ophthotech also stands to receive another $700 million in regulatory and sales milestones, and a royalty stream on the drug’s international sales through the deal. Ophthotech still owns the drug’s U.S. rights.
“The collaboration not only provides a substantial strategic and financial benefit to Ophthotech, it also begins to put in place essential elements designed to expand the reach of Fovista outside the United States, following potential regulatory approvals,” said Ophthotech CEO and chairman David Guyer, in a statement.
Shares of Ophthotech skyrocketed close to 24 percent in after-hours trading on Monday.
Wet AMD used to be treated with laser surgeries, but now patients typically get one of a group of drugs injected into the eye that block the a molecule called vascular endothelial growth factor (VEGF) that researchers believe causes the condition to worsen. Roche/Genentech’s cancer drug bevacizumab (Avastin) works this way, and is commonly prescribed for the condition off-label. Ranibizumab (Lucentis)—sold in the U.S. by Genentech, and internationally by Novartis—and Regeneron’s (NASDAQ: REGN) aflibercept (Eylea) have similarly become big successes as well.
Wet AMD has become the focal point of a huge amount of R&D spending, and dealmaking, in pharma and biotech. Regeneron, for instance, has risen to prominence through aflibercept, and just cut a $640+ million deal with Avalanche Biotechnologies, a startup out of California, to develop a gene therapy for the disorder. Several companies like Kala Pharmaceuticals, Ohr Pharmaceutical (NASDAQ: OHRP), and PanOptica, are trying to develop eye drops for it.
Ophthotech is trying to be the first to market with a drug that targets platelet-derived growth factor (PDGF) instead of VEGF. The idea is rather than just stopping abnormal blood vessels from continuing to grow, an anti-PDGF agent, when combined with an anti-VEGF drug, would cause those blood vessels to recede.
Ophthotech is running three Phase 3 studies to prove that the approach works, and just went public last year to help finance the effort. It’s testing Fovista in combination with ranibizumab in two of those studies, and with either aflibercept or bevacizumab in the other one.
Ophthotech is enrolling almost 1,900 patients and has said it expects to produce top-line data in 2016.
As part of today’s deal, Novartis and Ophthotech plan to work on a co-formulation of Fovista and a proprietary Novartis anti-VEGF product, so patients could be treated with one combined injection, instead of separate injections of Fovista and an anti-VEGF agent.