Novartis ($NVS) has scooped up the ex-U.S. rights to Ophthotech's Fovista--its late-stage therapy for wet age-related macular degeneration (AMD) that hopes to one day rival heavyweight franchises controlled by Roche ($RHHBY) and Regeneron ($REGN)--in a package deal potentially worth more than $1 billion. And Ophthotech ($OPHT), which touted the deal as one of the biggest ever for ex-U.S. drug rights, gets $330 million of that in a hefty upfront and near-term milestones for the Phase III work.
The biotech went public last year amid a wave of new offerings, gathering $165 million--which ranks in the top 10 biotech IPOs of the year--as investors bought into the blockbuster potential of Fovista. CEO Dr. David Guyer and President Dr. Samir Patel had developed the drug at Eyetech, then plucked the asset out for a spinoff after selling the company.
The treatment is an aptamer that's designed to inhibit platelet-derived growth factor subunit B, which regulates the cells found on the walls of blood vessels. In a Phase IIb study that was completed in the fall of 2012, investigators say that the drug used in combination with Lucentis, one of the dominant VEGF drugs on the market, significantly improved visual acuity when compared to a patient group which was treated only with Lucentis. And it helped that the company has been hanging on to the worldwide rights up to now. Ophthotech currently has a market cap of $1 billion, making it one of the biggest benefactors of the IPO boom.
In the deal Novartis is paying $200 million upfront, $130 million for Phase III milestones, up to $300 million for ex-U.S. marketing approvals and $400 million for meeting certain sales goals. That $330 million in upfront and near-term payments also marks one of the biggest licensing pacts of the last decade, signaling once again that Big Pharma is ready and willing to pay the big bucks when they see the right opportunities come along.
Ophthotech's shares soared 24% on the news Monday evening.
Wet AMD is unfortunately a blockbuster market and getting bigger. The disease afflicts a growing number of the elderly, and Novartis is angling to grab a share of it for themselves. In addition to partnering on a drug that can be used in combination with any anti-VEGF therapy, Novartis is also planning to study a combination of Fovista with a proprietary anti-VEGF drug of its own.
"As one of the largest ex-US partnering deals ever in the biotechnology industry, this collaboration with Novartis is potentially transformational for Ophthotech," said Guyer. "This agreement represents an important achievement for the company as we continue to execute on a strategy to deliver science-driven retinal products and offer physicians multiple treatment options to improve patient outcome. The collaboration also supports our previously stated plan to partner Fovista outside the United States while we retain sole commercialization rights to Fovista in the United States. The collaboration not only provides a substantial strategic and financial benefit to Ophthotech, it also begins to put in place essential elements designed to expand the reach of Fovista outside the United States, following potential regulatory approvals."
- here's the release