Novartis pays up to shut out eye competition

It does not take much imagination to figure out that, through yesterday’s licensing deal for Ophthotech’s Fovista, Novartis is moving to defend its macular degeneration franchise, currently comprising Lucentis, against growing competition from Eylea and off-label Avastin.

So it is ironic that Ophthotech still has different ideas: the group insists that it remains “agnostic” as to the choice of anti-VEGF agent with which Fovista is used, and indeed one phase III trial is combining the project with Avastin and Eylea. The $200m Novartis handed over up front can thus be seen as the price of shutting out the Swiss firm’s combo competition – outside the US, at least.

Lucentis sold $4.2bn last year for wet age-related macular degeneration (AMD), but Bayer/Regenron’s Eylea has made fast inroads, with 2013 revenues of $2.0bn. An even bigger threat is Roche’s oncology drug Avastin – whose active ingredient is a very similar molecule to Lucentis’s and which is increasingly being used off-label for wet AMD thanks to its relatively low cost.

Strategies aligned?

For Ophthotech Novartis is an ideal partner, given its expertise and critical mass in the eye disease space in general and wet AMD in particular, but one wonders whether the partners’ strategies are aligned.

While Novartis clearly needs to preserve its European Lucentis franchise, Ophthotech says it wants to allow physicians to choose their preferred anti-VEGF for administration with Fovista – be that Lucentis or Avastin, or indeed the VEGFr kinase inhibitor Eylea.

Two phase III Fovista/Lucentis combo studies are ongoing, and a third – adding Fovista on top of either Avastin or Eylea – is imminent. Ultimately, if Fovista is shown to work just as well with the competitors, Novartis’s Lucentis strategy could be compromised.

Phase III studies of Ophthotech's Fovista
Regimen No of patients Trial ID
Fovista plus Lucentis vs Lucentis alone 622 NCT01944839
Fovista plus Lucentis vs Lucentis alone 622 NCT01940900
Fovista plus Avastin/Eylea vs Avastin/Eylea alone 622 NCT01940887

Ophthotech stresses the importance of controlling the pivotal programme, which remains unchanged, and says it wants to market Fovista “solely and independently” in the US. Novartis will run all studies that might be required for ex-US approval.

The possibility of developing a co-formulation could offer additional protection, and Ophthotech retains the right to opt into a co-formulation with a “Novartis proprietary anti-VEGF product” in the US.

The $200m up-front fee is a significant one for a licensing deal that excludes the US, the late stage of Fovista’s development notwithstanding; another $300m could be due in regulatory milestones, and all payments are subject to a royalty under a financing deal to Novo A/S.

Pegylated aptamer

Fovista is a pegylated aptamer that targets platelet-derived growth factor-B, and is thought to be particularly efficacious in combination with anti-VEGF drugs.

Positive phase II data in a 449-patient wet AMD study put Ophthotech firmly in the spotlight when they were reported two years ago (Strong eye data open up interesting options for Ophthotech, June 14, 2012). The benefit shown at that time by a Fovista/Lucentis combo over Lucentis alone must have served as a key trigger for the Novartis deal.

However, since then Ophthotech has been relatively quiet, and the fierce bidding war followed by a quick acquisition that some analysts had predicted did not materialise. Still, the group has been active on the corporate front, seizing the opportunity of an opening IPO window to complete a $167m flotation last September.

Crucially, Ophthotech is still a logical takeover target for Novartis, particularly if Fovista’s pivotal combination programme works. However, Roche might be interested in locking in US rights to a Fovista combination, since it markets Lucentis in the US, and a feasible and efficacious combination of Fovista with Eylea would ensure interest from Bayer too.

Ophthotech will be sure to drive a hard bargain.

To contact the writer of this story email Jacob Plieth in London at jacobp@epvantage.com or follow @JacobEPVantage on Twitter

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