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Ophthotech Hits 52-Week Low on Unfavorable Fovista Data

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Ophthotech Corporation’s shares tumbled 86.4% after the company, along with partner Novartis AG (NVS - Free Report) , announced disappointing results from two pivotal phase III studies – OPH1002 and OPH1003 – evaluating Fovista (an anti-PDGF therapy), in combination with Novartis/Roche Holding AG’s (RHHBY - Free Report) Lucentis (an anti-VEGF therapy), for the treatment of wet age-related macular degeneration (AMD).

Shares of Ophthotech touched a 52-week low of $5.29 on Dec 12. Moreover, the company’s year-to-date share price movement shows that the stock has underperformed the Medical-Biomedical/Genetics industry. Specifically, Ophthotech has slumped 93.3% so far this year, significantly underperforming the 26% drop for the industry.

What Led to the Share Price Decline?

The international, multi-center, randomized, double-masked, controlled phase III studies evaluated the safety and efficacy of 1.5 mg of Fovista, in combination with Lucentis (Fovista combination therapy), compared to Lucentis monotherapy, in patients with wet AMD. A total of 1,248 patients over the age of 50 were enrolled across both the studies and results from the databases of the two studies were uncovered and analyzed simultaneously.

Data revealed that both the studies failed to meet the primary endpoint of a mean change in best corrected visual acuity from baseline at 12 months. Combined analysis from the two studies showed that patients who received Fovista combination therapy gained a mean of 10.24 letters of vision on the Early Treatment of Diabetic Retinopathy Study (ETDRS) standardized chart at 12 months in comparison to a mean gain of 10.01 ETDRS letters for patients who received Lucentis alone.

These results were not found to be statistically significant, thereby leading to the conclusion that adding Fovista to a monthly Lucentis regimen did not result in any improvement in vision in patients suffering from wet AMD. However, the Fovista combination therapy and Lucentis monotherapy were found to be well tolerated after one year of treatment, based on a preliminary analysis of the safety data.

In their press release, the companies said they will continue to analyze the data from these two studies in order to better understand the results. Data from both the studies, including secondary and exploratory efficacy endpoints, will be presented at an upcoming medical meeting.

We remind investors that Ophthotech had signed a license and commercialization agreement with Novartis in May 2014. While Ophthotech holds the rights to Fovista in the U.S., Novartis owns the exclusive rights to the candidate outside the U.S.

What’s Next for Ophthotech?

The reported phase III data are far from impressive, as evident from investors’ reaction. These data were highly awaited by investors and the wet AMD patient community alike, considering that the phase IIb study had demonstrated encouraging results. The combination of Fovista and Lucentis had then resulted in a 62% improvement in vision when compared to Lucentis alone.

With no approved product in Ophthotech’s portfolio and Fovista being the most advanced candidate in the company’s pipeline, the latest development will surely prove to be a huge blow for the company. Moreover, the deal with Novartis is now shrouded in uncertainty.

Also, note that the wet AMD market holds immense commercial potential. Approved treatments for wet AMD include anti-VEGF treatments such as Lucentis, Regeneron Pharmaceuticals, Inc.’s Eylea (REGN - Free Report) and Roche’s Avastin (off-label). While Lucentis and others work by blocking VEGF, Fovista works by blocking PDGF, which when administered in combination with anti-VEGF drugs, could offer improved visual outcomes for wet AMD patients, compared to anti-VEGF monotherapy.

However, Ophthotech is still evaluating Fovista in combination with either Eylea or Avastin in a third phase III study. Top-line data from the study are expected during the second half of 2017.

Regeneron Stock Up on the News

The unfavorable Fovista data, however, led to a 3.8% rally in Regeneron’s share price, removing a significant overhang for the time being. Successful development of Fovista could have eaten into Eylea’s sales.

Ophthotech is a Zacks Rank #3 (Hold) stock. Regeneron is a better-ranked stock in the health care sector, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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