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Ohr aims big with eye drop to rival blockbusters

By Esha Dey

(Reuters) - Patients who are being treated for a leading cause of blindness among the elderly might be able to scale back on eye injections if trials confirm the potential of an eye drop being developed by a small New York-based company.

Ohr Pharmaceutical Inc's Squalamine drug - an eye drop, as opposed to the injection therapies sold by Regeneron Pharmaceuticals Inc and Roche Holdings - doesn't necessarily need to outsell its formidable competitors.

Simply proving that the drop can be used as a complementary treatment to Regeneron's Eylea or Roche's Lucentis could be enough to ensure commercial success for Ohr in treating wet age-related macular degeneration (AMD).

The main challenge will be to demonstrate Squalamine's ability to travel to the back of the eye and stay there long enough to be absorbed. A mid-stage clinical trial is under way.

Ohr Pharmaceutical, backed by Baltimore and New York investors, was formed in August 2009. Within a month, it bought the rights to Squalamine for $200,000 from a trust set up to monetize the assets of now-defunct drug developer Genaera Corp.

The company's stock has doubled in the last year but, with a market capitalization of about $160 million, Ohr is a minnow alongside its competitors in the lucrative market to treat AMD.

Regeneron's Eylea drug, approved in November 2011, has transformed a relatively obscure biotech firm to a company worth nearly $30 billion today. In 2012, its first full year in the market, Eylea generated $838 million in sales.

Roche's drug, Lucentis, which is used to treat AMD and two other eye diseases, had sales of $1.5 billion in the United States last year.

AMD affects 1.8 million Americans aged 40 and above, according to the Centers for Disease Control and Prevention.

With millions more at "substantial risk" of developing the condition, the number of patients could reach nearly 3 million in 2020, it says.

AMD is a chronic condition that requires visually impaired patients to make monthly visits to the clinic.

This is where Squalamine comes in. The eye drop is being tested to determine whether it can reduce the frequency of eye injections needed after an initial dose of Lucentis.

Neil Bressler, chief of the retina division at the Wilmer Eye Institute at Johns Hopkins Medicine in Baltimore, said patients using Eylea or Lucentis required an average of seven injections during their first year of treatment and five or six in the second year.

"Even if you reduce those 12 or 13 injections to nine or 10, and if it is just a drop, then the safety and the ease is very, very good," said Bressler, an independent observer who has no affiliation with Ohr.

Regeneron and Roche declined to comment for this article.

'TRANSFORMATIVE'

Interim analysis of data from the mid-stage trial is expected in the second quarter of 2014.

Jonathan Aschoff, analyst at New York-based investment bank Brean Capital LLC, said he believed the data could be "transformative".

The only analyst listed by Thomson Reuters as covering Ohr, Aschoff has a target of $21 on the stock - more than two-and-a-half times its closing price of $7.98 on the Nasdaq on Monday.

He estimated peak Squalamine sales in excess of $1 billion a year by 2020, assuming an annual price of $4,000 for the eye drop as a complementary treatment to - not a replacement for - injections.

While extremely effective, Lucentis and Eylea - biotech drugs, as opposed to Ohr's chemical-based pharmaceutical drug - are relatively expensive; Lucentis costs about $2,000 per injection and Eylea about $1,850.

If Squalamine is proven to be effective, its lower price would make it an attractive proposition for patients, insurers and austere governments.

"Complete replacement (for injections) is completely unnecessary for Ohr's success," said Aschoff. "Just look at how well Eylea is doing with reduction of injection frequency as its main thrust."

Like Eylea and Lucentis, Squalamine targets a specific protein, VEGF, or vascular endothelial growth factor, in order to block the formation and growth of new blood vessels in the eye. It also targets other factors behind blood vessel growth.

The biggest questions to date over its effectiveness center on the drug's ability to travel behind the eye. Unlike everyday cleansing eye drops, which work on the front of the eye, Squalamine requires absorption at the back.

Genaera, Squalamine's former owner, tested the drug intravenously in successful early trials. In eye-drop form, it has been tested on rabbits, also with successful results.

Ohr Chief Executive Irach Taraporewala said the drug's chemical composition would "allow the molecule, once it got to the back of the eye, to stay there long enough to potentially allow for once- or twice-a-day delivery."

The next set of trial data will be key for the investors behind Ohr, including 7.1 percent-owner AIGH Investment Partners, a Baltimore-based investment firm founded by Ohr director Orin Hirschman.

If the results are good, Aschoff said it might eventually make sense for Ohr, which is also developing a treatment for cancer cachexia, a severe wasting disorder, to sell itself or Squalamine to a bigger competitor.

"(The acquirer) could buy it to sit on it, and not develop it, to save their injectable franchise," he said. "Or they could buy it to develop it - and see whichever one brings in the most revenue."

(Editing by Robin Paxton)

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