Auven Therapeutics pits rival PhIII dry eye drug against Allergan, Shire

Auven Therapeutics has staked a late-stage claim on a share of the dry eye market, posting some mixed Phase IIb/III data that included hitting a statistically significant improvement on a key measure of the increasingly common ailment. And their drug, a reformulated nano-version of Restasis (cyclosporine) designed to amp up therapeutic penetration and improve efficacy, is headed straight into a confirmatory Phase III study that the biotech/equity group believes will position it against Allergan's ($AGN) Restasis and Shire's ($SHPG) lifitegrast, if Shire's drug overcomes an earlier setback and makes it to the market first.

Auven is presenting the data at a scheduled Sunday session of the American Academy of Ophthalmology, but investigators say that Seciera (OTX-101) hit the primary endpoint on the lissamine green conjunctival staining score. And while the drug missed a co-primary endpoint for the global symptom score, execs say that a strong outcome on secondary endpoints sets the drug up for a solid shot at a repeat performance that should convince regulators to approve it.

R&D chief Peter Corr says that patients in neither of the two drug arms, two concentrations of 0.05% and 0.09%, nor the placebo arm were allowed to use artificial tears during the study, leading him to believe that the placebo provided the kind of relief that provided a strong response for patients. But a promising result on the Schirmer's test for tear production, a secondary milestone, provided some reassurance on the data.

The outcome positions Auven--based in the Virgin Islands with operations in Lausanne, Switzerland, Fort Lauderdale and Bermuda--to start and finish the Phase III in 2016, putting the company on track to a possible Q1 2017 filing with the 0.09% concentration.

Timing is important here. Shire has been pursuing its own late-stage program for lifitegrast, with problems in the first late-stage trial that forced the FDA to recently reject the treatment. But soon after the agency handed down its decision, Shire claimed a follow-up study had provided the positive data that is needed to gain an approval, and it's planning to refile soon. Several analysts believe that Shire is well positioned for an approval now. Both Shire and Auven have their sights set on the market leader, Restasis, which is marketed by Allergan, earning $1.3 billion last year.

Restasis has its own issues among dry eye sufferers, a condition that tends to worsen with age and increasing amounts of time spent staring at a computer. Auven's execs believe their reformulated therapy can demonstrate it works much faster, for a larger concentration of patients, than Restasis. 

"We don't have sales projections," says Stephen Evans-Freke, who co-founded Auven with Corr. "They're hard to do. The lack of efficacy limits the market." But with all the data that is available to them now, he adds, Auven's drug is "superior to anything out there."

If the company can make that argument stick, Auven plans to run an auction to find a buyer interested in taking it to the market. Almost unique for a biotech, Auven is an equity investor/developer hybrid that both develops drugs and invests in biotechs. An investment in the controversial female sexual dysfunction drug flibanserin recently paid off with a $1 billion buyout deal from Valeant ($VRX). Auven was also the majority owner of the U.K.'s Spirogen, which was bought out by AstraZeneca ($AZN) two years ago for $440 million. And there's another asset auction going on now, says Evans-Freke, which he expects to wrap up soon.

- here's the release

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