EyeGate Pharmaceuticals, a Waltham, MA-based company that has been seeking FDA approval for an eye disease drug for years, is sacrificing future worldwide rights to a treatment for uveitis to get enough money from drug behemoth Valeant Pharmaceuticals International to put the therapy back on regulatory track.
In exchange for an undisclosed upfront cash payment and milestones, Valeant is getting worldwide commercial and manufacturing rights to EyeGate’s Phase 3 drug for anterior uveitis, an inflammatory condition that can lead to lost vision or permanent blindness. Valeant (NYSE: VRX), the pharmaceutical giant based in Canada that is known for its aggressive deal-making, also gains the same rights to the company’s system for delivering drugs into the eye, called EyeGate II.
Valeant, which inked the agreement through an unnamed subsidiary, also received a last negotiation right to license EyeGate’s drug, EPG-437, for other indications. The drug is being studied for use in macular edema, dry eye, and cataract surgery, the company says in regulatory filings.
EyeGate, founded 17 years ago with technology from the Bascom Palmer Eye Institute at the University of Miami, has been waiting to run a second Phase 3 trial of its uveitis treatment because the company needed more funding, the company says in a regulatory filing.
The first Phase 3 trial showed that the treatment was about as effective as eye drops that are traditionally used as a treatment, though the EyeGate II device may need to be used less frequently, the company says in its regulatory filings. Its device, which is propped on a patient’s eye like a monocle, uses low-level electrical current to deliver a specific amount of the drug.
Yet EyeGate’s cash coffers had apparently been drying up after an attempt to wrangle money from the public markets delivered less than expected. EyeGate, which is traded over the counter, filed paperwork in July 2014 to become a public company traded on Nasdaq. It intended to raise about $30 million.
Even at the end of 2014, EyeGate had planned to use the proceeds of an IPO to finish the complementary Phase 3 trial on EPG-437 for uveitis by 2016, with the hope of regulatory approval by 2017. After cutting its pricing on the offering in half to between $6 and $8 per share in November, EyeGate sold fewer than 700,000 shares for $6 each in February on the over-the-counter market.
After the IPO, EyeGate shifted its focus from uveitis until it could raise more money, according to regulatory filings. Instead, it planned to initiate and complete a Phase 2 trial on macular edema, a condition that swells an area of the retina after fluid and protein deposits collect.
With Valeant, EyeGate has found a partner with enough cash to finish its clinical trials for uveitis, though it must give up the commercial and manufacturing rights worldwide. EyeGate would still receive milestone payments for the development, approval, and sales performance of the drug, as well as royalties based on net sales, the company said in a statement. EyeGate executives were not immediately available for comment.
Valeant is no stranger to deal-making. It has for years purchased companies or signed licensing agreements, sometimes using multibillion-dollar debt packages to fund the deals, in order to build out a pipeline of profitable or potentially profitable drugs. Salix, based in Raleigh, NC, is one example. The assets of Seattle-based Dendreon, which filed for Chapter 11 bankruptcy last year, is another.
One final note is that EyeGate signed a licensing deal with RXi Pharmaceuticals, a Worcester, MA-based developer of RNA interference treatments, in 2010 to combine RXi’s treatment with EyeGate’s ability to delivery drugs noninvasively. RXi doesn’t appear in EyeGate’s recent regulatory filings.