Ominous Competition For Lucentis and Eylea

Richard is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Lucentis from Roche (NASDAQOTH: RHHBY) and Novartis (NYSE: NVS), and Eylea from Regeneron (NASDAQ: REGN) were recently approved by the FDA and combined are already producing revenues of close to $2.5 billion.  The shares of Roche and Novartis may be down a bit from their recent highs one month ago, but Regeneron continues to streak to new highs and give shareholders a spectacular ride.

Lucentis and Eylea are both anti-VEGF (vascular endothelial growth factor) drugs that are injected directly into the eyeball to treat age-related macular degeneration and macular edema that is a growing problem affecting our aging population and millions of diabetics.

<img src="/media/images/user_14667/rhhby_large.png" />


<img src="/media/images/user_14667/nvs_large.png" />


<img src="/media/images/user_14667/regn_large.png" />

Lucentis was approved by the FDA in August of 2012 and Eylea was approved in September 2012.

What is Macular Degeneration and Macular Edema? 

Macular Degeneration and Macular Edema are usually age related or a complication of diabetes that is the leading cause of vision loss and blindness.  Macular Edema is a swelling of the retina due to leaking of blood and fluid from blood vessels within the macula. Growth of new blood vessels in the retina may also fuel Macular Edema, but it is the leaking of blood and fluid that causes the primary damage to the sight receptors. The cytoskeletal structure of the cells that make up the lining of the blood vessels begins to weaken making it difficult for them to bind together to form a tight barrier to keep blood and fluid in the vessels.  The blood then leaks out into the retina causing damage to the sight receptors.

Diabetes causes Diabetic Retinopathy and Diabetic Macular Edema.  There are over 26 million diabetics and 79 million pre-diabetics in the United States alone and the numbers are growing fast due the global diabetes epidemic.  In 2010, 3.9 million adults with diabetes reported vision problems, according to the FDA.

Opthalmic Therapeutics Market Size

Genetic Engineering and Biotechnology News expects the overall market for ophthalmic therapeutics to reach $18.7 billion this year.  Lucentis has already captured about $1.4 billion in sales in the past 12 months 

and Eylea is projecting $750 million for this 12 month period.

How Lucentis and Eylea Work

Anti-VEGF drugs like Lucentis and Eylea do not correct the underlying problem of leaking blood vessels in the retina but they can reduce the growth of new blood vessels and help reduce retinal swelling.

Dr. Bandello, a well-known eye surgeon and medical professor is quoted in Opthalmology Times, “With regards to the second therapeutic option, anti-VEGF therapy, I have to say that, in my hands, many of my patients appear to be unresponsive to this mode of treatment; around 50% of patients show some sensitivity to anti-VEGF therapy whilst the remaining 50% are totally unresponsive.

The side effects of VEGF eye injections do not affect every patient the same but to some, they can be severe not to mention that an injection directly into the eyeball is a very unpleasant experience to say the least.   The most frequently reported ocular adverse reactions from VEGF injections into the eyeball following injection of Lucentis are: eye pain, ocular hyperaemia, increased intraocular pressure, vitritis, vitreous detachment, retinal haemorrhage, visual disturbance, vitreous floaters, conjunctival haemorrhage, eye irritation, foreign body sensation in eyes, increased lacrimation, blepharitis, dry eye and eye pruritus.

The most frequently reported non-ocular adverse reactions are headache, nasopharyngitis and arthralgia.  Anaemia Hypersensitivity Anxiety Headache. Vitritis, vitreous detachment, retinal haemorrhage, visual disturbance, eye pain, vitreous floaters, conjunctival hemorrhage, eye irritation, foreign body sensation in eyes, lacrimation increased, blepharitis, dry eye, ocular hyperaemia, eye pruritus, retinal degeneration, retinal disorder, retinal detachment, retinal tear, detachment of the retinal pigment epithelium, retinal pigment epithelium tear, visual acuity reduced, vitreous haemorrhage, vitreous disorder, uveitis, iritis, iridocyclitis, cataract, cataract subcapsular, posterior capsule opacification, punctuate keratitis, corneal abrasion, anterior chamber flare, vision blurred, injection site haemorrhage, eye haemorrhage, conjunctivitis, conjunctivitis allergic, eye discharge, photopsia, photophobia, ocular discomfort, eyelid oedema and eyelid pain.

Ominous Competition for Lucentis and Eylea Revealed in Retina Today

Suddenly, from out of nowhere, a new competitor appeared recently and was revealed in a well-known medical journal, Retina Today, with a cover story titled, “Oral Danazol For DME”.  It turns out that there is a little-known company called Ampio Pharmaceuticals (NYSEMKT: AMPE) that has gone unnoticed developing a re-purposed drug that appears to work better than Lucentis and Eylea because it goes right to the core problem and repairs it.  This new drug is called Optina and it works by repairing the cells making up the blood vessels that are leaking.

<img src="/media/images/user_14667/ampe_large.png" />

According to the publication, Optina repairs the cells’ cytoskeletal structure so that they can bind together tightly again and form a barrier to leakage in the blood vessels in the retina.  This mechanism is entirely different than Lucentis and Eylea because it actually goes right to the root of the problem and repairs the F-actin Cortical Ring structure of the damaged blood vessel cells.  And it does so without any adverse side effects.  Also, consider that Optina is a pill that is certainly far preferable to an unpleasant injection directly into the eyeball.

According to the company’s recent press release about their clinical trial progress, Optina is within a few weeks of starting a phase IIb clinical trial that if successful has the appearance of relatively quick approval because of it’s known safety record and because it is scientifically known to address the problem directly as described in the article in Retina Today.  Optina’s phase IIb trial, if successful, can possibly roll into a pivotal phase III trial in a fast timeline.  Re-purposed drugs enjoy the FDA 505(b)2 pathway in the approval process that can greatly shorten the time for approval and also greatly reduce the risk of failure because it has already been proven for safety.  Keep a close eye on Optina because it is possible that it could be disastrous for both Lucentis and Eylea beginning in 2014 when it is expected to be ready for an approval decision by the FDA. 

Lucentis and Eylea

Lucentis may be enjoying blockbuster sales status and Eylea may be eating into Lucentis sales because it requires fewer injections into the eye, but it doesn’t take much imagination to figure out what is going to happen to the sales of both drugs if Optina is approved.

If Lucentis sales decrease, it will probably not have a significant impact on the shares of Roche or Novartis, but if Eylea sales crater as a result of Optina, it is likely that Regeneron shares will also crater big time since Eylea is a major portion of their anticipated revenue stream.

With news of Optina’s likely approval on the near horizon, it might be prudent to take some profits off the Regeneron table.  It might even be a good short when or even before Optina gets approved.  Watch Optina and Regeneron closely!

Regeneron shares are at all time highs and have demonstrated powerful momentum, but they appear to be peaking and losing momentum and in my opinion are a good shorting opportunity for the near term.

I have no positions in any of the stocks mentioned in the article.

blog comments powered by Disqus