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Ocular’s Shares Fall After Eye Treatment Fails Latest Test

Xconomy Boston — 

Ocular Therapeutix could end up with an approved product when the FDA decides on its implantable, sustained-release drug delivery device next month. But even if it does, the Bedford, MA, company’s prospects to sell that device, known as OTX-DP (Dextenza), for more than just post-surgical pain took a hit this morning.

Bedford, MA-based Ocular (NASDAQ: OCUL) said that OTX-DP, an implantable device that delivers the steroid dexamethasone into the eye over about 30 days, failed the second of two Phase 3 trials in allergic conjunctivitis, a chronic condition that causes itchy and watery eyes. Though measures of eye itching among patients on Ocular’s drug-device was “numerically lower,” the results weren’t statistically significant.

OTX-DP had produced mixed results in the earlier Phase 3 trial—it met one goal, and missed another—so the latest news puts its future as an allergic conjunctivitis treatment in limbo. CEO Amar Sawhney said in a statement that the company aims to meet with the FDA to discuss the data and “chart an appropriate path forward” for the treatment in allergic conjunctivitis.

“We are currently in the process of conducting a thorough analysis of the data from the second Phase 3 trial to fully understand the difference in efficacy between the two Phase 3 trials,” Sawhney said in the statement.

Shares of Ocular fell more than 40 percent, to about $7 apiece, in pre-market trading on Monday.

The news is a setback for Ocular, but despite the failed trial, OTX-DP could still has a chance to be on the market soon. The FDA will decide whether to approve it by July 24 for patients with pain and inflammation following cataract surgery. If successful—by no means a guarantee, given OTX-DP posted some mixed results in post-surgical pain and inflammation as well—Ocular would have two revenue generating products. Ocular already sells a hydrogel-based ophthalmic would sealant (ReSure Sealant) that the FDA approved in January 2014; it’s used to close up wounds from corneal incisions after cataract surgery.

Ocular was formed in 2006 and went public in July 2014 at $13 per share. The company makes tiny plugs that are inserted into the tear ducts and designed to release drugs over a period of weeks or months, which in theory would enable a patient to steer clear of more cumbersome treatments like the eye drops people have to take several times a day after cataract surgery. The plugs are mostly made of hydrogel, which is gradually absorbed by the body. In addition to dexamethasone, Ocular is testing this system with other already-approved drugs, like the glaucoma treatment travoprost (Travatan) and the antibiotic moxifloxacin. The glaucoma treatment failed a mid-stage trial in October, though Ocular still aims to move it into Phase 3 trails later this year.

Ocular is holding a conference call this morning to discuss the latest data.