Therapeutic focus - Eye care products in demand in market dominated by few
From NicOx and ThromboGenics to Novartis and Sanofi, there is no shortage of companies, of all sizes, seeking a presence in the eye care market. Industry’s interest in the space is not surprising given that many vision problems are a complaint of the elderly, with the West’s ageing populations only increasing demand for ophthalmology treatments.
Novartis’ consolidation of Alcon last year – the takeover cost a huge $48bn in total – means the Swiss drug maker is by far the biggest presence; beyond the top five players the market is very fragmented. Ripe for consolidation perhaps but a look at the most valuable pipeline products shows most are already in big pharma hands, EvaluatePharma data show (see tables). Carving out a substantial share in this space will take time, and will not come cheap.
|Top 5 companies: Eyecare|
|Company||WW Rx & OTC Sales ($m)||Market Share||Market Rank|
|Bausch + Lomb||919||1,321||+6%||7.1%||7.0%||7||5|
The table above shows the top five eye care players; Novartis is enjoying clear blue water between itself and the nearest competitor, Allergan. With strong growth predicted for the Alcon products, it is interesting to see that little market share gain is forecast for the runners up in this market over the next four years.
Behind this five sit a group of companies with sub $1bn franchises - for example ISTA Pharmaceuticals, QLT and Laboratoires Théa, a private French eye care specialist. Merck & Co’s takeout of Inspire Pharmaceuticals for $430m last year removed one of the remaining mid-sized standalone ophthalmology businesses (Merck building ophthalmology business with Inspire deal, April 6, 2011).
The space has been active in terms of deal making in the last few years, and promising products have gone for sizeable prices. The Allergan deal over age-related macular degeneration product MP0112 in particular saw a healthy $45m being paid out for a phase II product that the companies believe could out-do Lucentis and new kid on the block Eylea in terms of number of injections (Allergan sees dosing potential in Molecular Partners' AMD candidate, May 5, 2011).The product is likely to be a key focus at the company’s R&D day on March 28.
|Top 10 opthalmology deals over the last 5 years|
|Rank||Company||Product||Pharmacological Class||Deal Partner/ Product Source||Status on Deal Date||Deal Date||Deal Value ($m)||Upfront Payment ($m)|
|1||Pfizer||iSONEP||Anti-sphingosine-1-phosphate (S1P) MAb||Lpath||Phase I||Dec 2010||512||14|
|2||Allergan||MP0112||VEGF-A antagonist||Molecular Partners||Phase II||May 2011||420||45|
|3||Otsuka Holdings||ACU-4429||Non-retinoid visual cycle modulator||Acucela||Phase I||Sep 2008||263||5|
|4||Bausch + Lomb||BOL-303259-X||Nitric oxide-releasing prostaglandin F2 analogue||NicOx||Phase II||Mar 2010||180||10|
|5||Allergan||Ophthalmic Research Project||Eye preparation||Polyphor||Research project||Oct 2008||68||7|
|6||Allergan||R99 compounds||Prostaglandin receptor agonist||Asterand||Pre-clinical||Sep 2008||62||6|
|7||Otsuka Holdings||Kinase Inhibitors Research Project||Kinase inhibitor||MethylGene||Research project||Mar 2008||62||8|
|8||Santen Pharmaceutical*||DE-109||Rapamycin analogue (mTOR inhibitor)||MacuSight||Phase II||Jun 2010||50||50|
|9||Allergan||Lastacaft||Anti-histamine||Johnson & Johnson||Approved||Sep 2010||35||23|
|10||Immune Pharmaceuticals||iCo-008||Anti-eotaxin-1 MAb||iCo Therapeutics||Phase I||Dec 2010||33||1|
|* Product acquisition||Total||1,684||170|
Given the stated aim of many companies to grow in this space, further deals are likely. Bausch + Lomb, the private US company better known for glasses and contact lenses, has made no secret of its wish to expand its therapeutic product portfolio. The company and partner NicOx announced positive data on glaucoma product BOL-303259-X last week.This was followed by an acquisition by NicOx of a small private UK company, and the proclaimation of its own move to establish an ophthalmology franchise (EP Vantage Interview - NicOx strategy becoming clearer as its gaze shifts to eye care, March 22, 2012).
Similar noises were heard from ThromboGenics, which snared Novartis, in the shape of Alcon, as partner for its product ocriplasmin, a treatment for vitreomacular adhesion (ThromboGenics scores Novartis and sets US in its sights, March 16, 2012).
The table below shows the most valuable eye treatments in development, based on net present value. This will exclude products being developed by private companies, for which sales forecasts do not exist. However it reveals that the majority of the products considered most valuable commercially, to be already owned by the big players in this market.
Exceptions include Omeros' OMS302; encouraging results from the anti-inflammatory agent were announced earlier this month and many analysts have high hopes for the product (Omeros eyeing deals as ophthalmology drug succeeds, March 14, 2012). And should QLT’s lataprost delivery system, which delivers the former Pfizer blockbuster glaucoma treatment in the form of an internal plug in the eye, generate interesting data, the company could attract some interest.
|Most valuable ophthalmology products in development|
|Rank||Company||Product||Pharmacological Class||Current phase||Today's NPV ($m)|
|2||QLT||Latanoprost Punctal Plug||Prostaglandin F2 analogue||Phase II||+562|
|3||Omeros||OMS302||Anti-inflammatory agent & anti-cholinergic||Phase III||+126|
|4||Sanofi||FOV2304||Bradykinin B1 receptor antagonist||Phase II||+104|
|5||Santen Pharmaceutical||DE-111||Beta adrenoreceptor antagonist & prostaglandin F2 analogue||Phase III||+100|
|6||Santen Pharmaceutical||DE-109||Rapamycin analogue (mTOR inhibitor)||Phase III||+73|
|7||Novartis||ESBA105||Anti-tumour necrosis factor alpha (TNFa) MAb||Phase II||+68|
|8||NovaBay Pharmaceuticals||NVC-422||Aganocide||Phase II||+63|
|9||Sanofi||FOV1101||Selective steroid amplifier||Phase II||+62|
|10||Santen Pharmaceutical||DE-102||Corticosteroid||Phase III||+27|
In the meatime, however, the table below shows that the biggest ophthalmology products - as in most sectors - remain in the hands of big companies, with Novartis' domination clear.Small products can and will be found by companies seeking to build a presence. But the creation of even a mid-tier in this market is a long way away.
|Most valuable marketed opthalmology products|
|Annual Sales WW - Sales ($m)|
|2||Eylea||Regeneron Pharmaceuticals/Bayer||VEGFr kinase inhibitor||AMD||-||1,648|
|3||Restasis||Allergan||Tear secretion enhancer||Dry eye||621||978|
|4||Patanol||Novartis/Kyowa Hakko Kirin||Anti-histamine||Ocular inflammation||263||742|
|5||Lumigan||Allergan||Prostaglandin F2 analogue||Glaucoma||527||713|
|6||Refresh||Allergan||Eye preparation||Dry eye||350||553|
|7||Xalatan||Pfizer||Prostaglandin F2 analogue||Glaucoma||1,749||530|
|9||Travatan||Novartis||Prostaglandin F2 analogue||Glaucoma||211||455|
|10||Combigan||Allergan||Alpha 2 adrenoreceptor agonist & beta adrenoreceptor antagonist||Glaucoma||172||313|