Event - FDA advisory committee will help ISTA see the future more clearly

Analysis

In exactly a week ISTA pharmaceuticals should have a much better idea of what its future will hold, and if that future might include a new marketed product. The group is up in front of an FDA advisory committee for Bepreve, its drug for the itching associated with allergic conjunctivitis.

But if the group’s share price is anything to go by the market has already had a look in its crystal ball and seen a dazzling future for ISTA. Over the last four weeks shares in the company have risen by 49%. The recovery since the start of the year is even more impressive with the stock rising almost five-fold to today’s price of $3.68.

The sharp share price rise in anticipation of a positive ruling indicates Bepreve’s importance. According to consensus forecasts from EvaluatePharma the drug is worth $126m to ISTA, making it the second most valuable drug in the company's pipeline. It is also set to be the joint biggest growth driver at the company, generating sales of $80m by 2014.

Unfamiliar territory

The drug is in front of the committee because it is a new chemical entity, a histamine H1 receptor antagonist. The only other histamine H1 receptor in development is Somaxon Pharmaceuticals’ insomnia drug, Silenor, according to EvaluatePharma. The regulators may also want to have a look at Bepreve because of worries over cardiac QT interval. It was this safety concern that led Silenor to receive a complete response letter in February (Somaxon reeling from Silenor rejection, February 27, 2009).

If it does make it past the committee Bepreve will be up against some stiff competition if it clears the next hurdle and is approved at its September 12 PDUFA date.

At present the market is dominated by Alcon’s Patanol, which last year had sales of $439m and a 48% market share. Even though it is entering a market that already has a number of products, Bepreve should be able to take market share due to its advantages; these include once-daily dosing, as opposed to Patanol’s twice daily regimen, and its considerably faster onset of action.

Perhaps more importantly, Bepreve prevents some of the tissue damage associated with allergic conjunctivitis, by stopping the build up of eosinophil white blood cells in the eye. Eosnophils are produced in the bone marrow and during allergic conjunctivitis they accumulate in the inflamed conjunctiva, causing tissue damage and increasing allergy symptoms.

Future catalysts

Getting past the FDA advisory committee and then approval in September would be welcome news given the setbacks and uncertainty that have dogged the company. It could also be the start of a slew of positive news for ISTA.

Results from phase III studies from the group’s other most valuable drug, T-Pred, are expected in the next few weeks and will go toward the drug's second NDA filing. In May 2007 the treatment, which is expected to generate sales of $80m by 2014, received a non-approvable letter.

The group is also expected to file an sNDA for its current best selling drug Xibrom, for the treatment of ocular pain and inflammation associated with cataract surgery, in the second half of the year, as a once-daily treatment. The drug’s patent expired in January of this year and so far it has been lucky that no one has yet launched a generic version.

Plans for an earlier filing were scuppered by mixed trials in December, which caused the FDA to request additional trials before it would consider a filing. The drug is now likely to be delayed until 2010, making the entry of generics more likely, but approval will extend the life of Xibrom by another three years. 

There has also recently been good news about the use of a low dose of bromfenac, the active ingredient in Xibrom, in phase II dry eye trials. The group’s three marketed drugs, Xibrom, Istalol and Vitrase have also continued to gain market share and topped the field in their respective markets in the first quarter of the year.

As such, with so many potential catalysts, and a high probability of a yes from the advisory committee, despite the recent share price gains in ISTA there could still be a lot more to come.

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