Ophthotech’s attempt to change the standard of care for a common form of vision loss, age related macular degeneration, fell short earlier this week, sending shares spiraling downward and leaving the fate of the company and its lead drug, pegpleranib (Fovista), unclear. The company clarified two things today—its future will involve a much smaller workforce, and a more streamlined clinical development plan.
Ophthotech (NASDAQ: OPHT) said in a regulatory filing Friday that will ax 125 to 135 employees. The news, disclosed just days after pegpleranib failed two Phase 3 trials in patients with the “wet” or more damaging form of AMD, is part of a restructuring that will leave the company with about 20 to 30 workers total. Shares of Ophthotech have fallen more than 87 percent—from $38.77 to $4.86—since Monday morning when news of the failed studies broke.
Ophthotech will also significantly curtail the ongoing development plan for pegpleranib. Patients in the two failed trials were originally going to continue getting pegpleranib and a second wet AMD drug, ranibizumab (Lucentis), over the long term. Ophthotech will stop those efforts, and will also shut down every other pegpleranib trial aside from the final Phase 3 that has already been fully enrolled and is ongoing, in which patients are getting pegpleranib and one of two other drugs often prescribed for wet AMD, bevacizumab (Avastin) or aflibercept (Eylea).
Data from that trial are expected next year, though it’s unclear what the path forward will be for pegpleranib even if that study succeeds. Leerink Partners analyst Joseph Schwartz speculated in a research note this week that even with good data, the company would still likely need to run another trial to confirm the results.
Indeed, given the crushing setback, Ophthotech’s best bet going forward may be to rally around another drug, avacincaptid pegol (Zimura), that is being tested for the “dry” form of AMD. But that will be a tall order for Ophthotech as well. While 85 and 90 percent of roughly 2 million AMD patients in the U.S. have dry AMD and there are no approved treatments for it—meaning there is a huge potential market opportunity for Ophthotech—the underlying biology is much less understood than with wet AMD, in which abnormal blood vessels form in the eye and leak fluid. The drugs used to treat wet AMD block a protein called VEGF and stop abnormal blood vessels from forming. They aren’t cures, but they can help restore some vision and prevent further damage to the eyes of wet AMD patients. With pegpleranib, Ophthotech was trying to show that blocking a different protein, PDGF, might restore even more vision for patients.
As Leerink’s Schwartz wrote in his research note, by comparison, dry AMD has been “relatively hard to crack given the multifactorial nature of the disease.” Ophthotech is testing avacincaptid pegol in a Phase 2/3 trial in dry AMD, and a mid-stage study for wet AMD in combination with other anti-VEGF drugs.
Ophthotech had $321 million in cash on hand as of September. The results released Monday were a crushing blow; CEO David Guyer said on a conference call that executives were “simply stunned” by the data. “As of now we don’t have really any answers” as to why the drug didn’t reproduce the type of results it did in earlier testing, Ophthotech president Samir Patel said on the call.