Blog Coverage Ocular Therapeutix Announces a Potential $315 Million Drug Development Deal with Regeneron Pharma

LONDON, UK / ACCESSWIRE / October 14, 2016 / Active Wall St. blog coverage looks at the headline from Ocular Therapeutix, Inc. (NASDAQ: OCUL) as the company announced on October 13th, 2016, that it has entered into a strategic collaboration, option and license agreement with Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN). Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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The Collaboration

Ocular and Regeneron will collaborate on the development of a sustained release formulation of the vascular endothelial growth factor (VEGF) trap aflibercept for the treatment of wet age-related macular degeneration and other serious retinal diseases. This formulation is currently in preclinical development. Regeneron’s aflibercept is currently approved by the U.S. Food and Drug Administration for certain indications under the brand name EYLEA®.

Why the deal?

Ocular Therapeutix is currently developing proprietary sustained-release hydrogel-based drug delivery depots for intravitreal injection that can be formulated with both small and large molecule pharmaceuticals, such as tyrosine kinase inhibitors (TKIs) and protein-based anti-VEGFs, respectively. Ocular said that this sustained release formulation could have the potential to significantly reduce dosing frequency and subsequently reduce doctor’s 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.

Under the terms of the agreement, Ocular Therapeutix and Regeneron will aim to develop a sustained release formulation of aflibercept that is suitable for advancement into clinical development. 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. Ocular Therapeutix will retain all rights to develop its sustained-release hydrogel-based drug delivery platform with all other non-VEGF targeting compounds as well as with small molecule pharmaceuticals, including TKIs, for other retinal diseases.

Transaction Details

If Regeneron opts to exercise the option, Ocular Therapeutix would receive a payment of $10 million from Regeneron and Ocular Therapeutix would be responsible for funding development through Phase 1. Regeneron would be responsible for any subsequent development and commercialization costs. Ocular Therapeutix would be eligible to receive up to $305 million in milestone payments from Regeneron for a sustained release version of aflibercept containing Ocular Therapeutix’s sustained release hydrogel depot, comprised of up to $155 million in development and regulatory milestone payments, $100 million for the first commercial sale and up to $50 million in commercial milestone payments. In addition, Ocular Therapeutix is eligible to receive tiered high single-digit to low-to-mid teen-digit royalties on potential future net sales.

Amar Sawhney, Ph.D., President, Chief Executive Officer, and Chairman of Ocular Therapeutix stated:

“We are excited to partner with Regeneron to develop a potential first-in-class sustained release protein-based anti-VEGF hydrogel injection for wet AMD, DME, RVO, and other serious retinal diseases. 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.”

Breakthrough for Ocular

The agreement represents the first major partner for Ocular’s low-release hydrogel technology, which is also the foundation of the company’s experimental drug, Dextenza. Ocular plans to submit the New Drug Application (NDA) for its lead product candidate soon, after the U.S. Food and Drug Administration on July 25th, 2016, rejected the company’s application, citing issues pertaining to deficiencies in the manufacturing process and controls identified during a pre-NDA approval inspection of the company’s manufacturing facility.

Stock Performance

Following the announcement on Thursday, the stock closed the trading session at $7.22, surging 14.42% from its previous closing price of $6.31. A total volume of 12.67 million shares have exchanged hands, which was higher than the 3-month average volume of 1.00 million shares. Ocular Therapeutix’s stock price advanced 10.91% in the past month and soared 43.82% in the last three months.

Yesterday, Regeneron Pharma’s shares were slightly up 0.62%, finishing the day at $375.79 with volume of 526.35 thousand shares exchanging hands by the close of the trading session. For the last three months, the stock has gained 0.53%. Shares of the company have a PE ratio of 58.66.

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