Regeneron Bets $315 Million on Ocular Therapeutix for an Upgraded Form of Eylea

Regeneron Bets $315 Million on Ocular Therapeutix for an Upgraded Form of Eylea October 13, 2016
By Alex Keown, Breaking News Staff

BEDFORD, Mass— Shares of Ocular Therapeutix have jumped nearly 19 percent this morning after the company, which develops treatments for diseases of the eye, struck a deal worth up to $315 million with Tarrytown, N.Y.-based Regeneron to develop a new formulation of that company’s approved drug, Eylea.

Ocular and Regeneron are combining their efforts to develop a sustained release form of Eylea (aflibercept), a vascular endothelial growth factor trap, for the treatment of wet age-related macular degeneration (wet AMD) and other serious retinal diseases. Eylea, which is injected into the eyes, is approved for wet AMD, as well as macular edema following retinal vein occlusion. For wet AMD patients, the drug is typically administered monthly, or every two months. Using Ocular’s sustained-release hydrogel-based drug delivery technology, Regeneron is hoping to develop an updated version of Eylea that can be administered less frequently.

“This sustained release formulation could have the potential to significantly reduce dosing frequency and subsequently reduce doctor visits, thus reducing the burden of care for patients, caregivers and physicians, and may decrease the likelihood of certain side effects associated with frequent intravitreal injections,” Amar Sawhney, president and chief executive officer of Ocular, said in a statement.

Wet age-related macular degeneration is characterized by loss of vision caused by degeneration of the central portion of the retina. Abnormal growth of blood vessels below the retina, and the leakage of fluid and protein from the vessels, causes retinal degeneration and can lead to severe and rapid loss of vision. Wet AMD is the leading cause of blindness in individuals aged 50 years or older.

An updated version of Eylea will allow Regeneron to continue to battle it out with Roche 's Lucentis, which pulled in around $4 billion in 2013.

Under terms of the deal, Ocular will receive an initial payment of $10 million from Regeneron and could earn up to $305 million in milestone payments. In addition, Ocular Therapeutix will be eligible to receive tiered high single-digit to low-to-mid teen-digit royalties on potential future net sales, the company said. Regeneron has the option to obtain an exclusive license to use Ocular Therapeutix’s hydrogel-based technology for the development and commercialization of a sustained release formulation of aflibercept and other biologics targeting VEGF for ophthalmic indications.

This is good news for Ocular, a company that has seen its stock prices recover from a series of falls in 2015, particularly a 30 percent plunge in April following the failure of the company’s post-operative cataract drug therapy OTX-DP. In July, the U.S. Food and Drug Administration spurned the company’s post-operative eye pain treatment, Dextenza. In a Complete Response Letter, the FDA raised concerns about deficiencies in the manufacturing process, but did not cite any efficacy issues. After attempting to correct the issues, in August Ocular said it intended to seek approval for the drug.

In January 2014, the FDA approved Ocular’s first product, ReSure Sealant, which is used to prevent postoperative fluid loss from the eye following cataract surgery.

Shares of Ocular hit a morning high of $8.03, but have since slid back down to the current price of $7.32 per share, as of 11:09 a.m.

There are several early stage products aimed at wet AMD, including a preclinical product in development by Florida-based Applied Genetic Technologies Corporation .

Back to news