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Oyster Point clamming up for now as $22M series A funds corneal surface bid

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By Randy Osborne
Staff Writer

Oyster Point Pharmaceuticals Inc.’s $22 million series A financing will push two lead therapies in corneal surface disorders through phase II trials, but CEO Jeffrey Nau told BioWorld he was “not willing at the moment to comment on the mechanism of action. We want to make sure that we keep a competitive advantage for a little bit. Once we have our first clinical trial under our belt – and we’re very optimistic at the moment – we’ll share more information,” he said.

“Many of the competitors out there in the market are really going after the inflammatory or chronic component” of such indications as dry eye disease (DED), Nau added, while his firm targets the root cause.

New Enterprise Associates and Versant Ventures led the round. The company takes its name from a South San Francisco area location where one of the people involved in Oyster Point works, Nau said, though the firm is based in Princeton, N.J.

Nau served most recently with Ophthotech Corp., of New York, as vice president of clinical and medical affairs. Before that, he worked in a similar capacity with Basel, Switzerland-based Roche Holding AG unit Genentech, steering ophthalmology medical affairs.

He noted that, despite having “great therapies” for such diseases at wet age-related macular degeneration, patients only take them for a while. “With the current therapies for DED, it’s very similar,” he said. “We have these two big drugs, a huge market, and big numbers behind both of these drugs, but those numbers should actually be exponentially higher, because patients drop off pretty rapidly. The data we have say patients get their scripts filled for those drops two or three times” before they discontinue, he said. “These drugs are worth $1.5 billion, with [patients] only getting a couple of scripts filled.”

Dublin-based Allergan plc leads the market with Restasis (cyclosporine ophthalmic emulsion), followed by Xiidra (lifitegrast ophthalmic emulsion, Shire plc).

Oyster Point has existed since 2015, with Versant and NEA on board since its inception. Other private investors also have taken part. Nau took over as CEO at the end of March, and the company has “made some significant progress” since then, he said. Its area of focus “does include dry eye, but could include other not only orphan diseases but other diseases of the ocular surface that we’re very interested in,” he said. The firm owns intellectual property beyond that which covers the two candidates bound for phase II dose-ranging studies in the first quarter of next year, he said.

“We have a whole host of consultants and the company is fairly virtual,” Nau said, adding that “I’m the only employee that’s spending l00 percent” of his time on the firm. Hiring will start soon. “We’ve done some really good things, and the folks that were involved before I came in deserve a big pat on the back,” he said. “We’ve got quite a long ways on a pretty slim budget.”

Rivals battle, generics near

Others are even further along. At the end of last month, Rockville, Md.-based Regenerx Biopharmaceuticals Inc. disclosed the results of its phase III DED trial sponsored by its U.S. joint venture, Regentree LLC, of Princeton, N.J. Called Arise-2, the trial investigated the safety and efficacy of RGN-259, a formulation of thymosin beta 4, compared to placebo in 601 patients. The experiment, conducted with Andover, Mass.-based Ora Inc., demonstrated a number of statistically significant improvements in both signs and symptoms with 0.1 percent RGN-259 vs. placebo, while showing excellent safety, comfort and tolerability profiles. Specifically, the ocular discomfort symptom showed a statistically significant reduction in the RGN-259-treated group at day 15 as compared to placebo (p=0.0149) in the change from baseline.

“Since the Arise-2 study population is more diversified than the patient population in Arise-1, Arise-2 did not duplicate the results of Arise-1,” H.C. Wainwright analyst Raghuram Selvaraju acknowledged in a report, and Regentree plans to meet with the FDA later this year about the findings. “We believe the FDA may require the company to conduct an additional trial before the submission of an NDA, which could postpone potential commercialization towards late 2019,” he wrote, reiterating his buy rating on the shares.

Meanwhile, the market battle between Restasis and Xiidra goes on. Piper Jaffray analyst David Amsellem, commenting on Shire’s earnings last month, said Xiidra “continues to chip away at dry eye market volume share for Allergan’s Restasis. Regarding the potential availability of Restasis generics, we would view that as something of a net neutral for Xiidra. On one hand, there is the reality that access to Restasis generics (to the extent there are multiple entrants) will likely be easier than access to Xiidra (certainly in terms of patient out-of-pocket exposure). That said, with Allergan no longer supporting Restasis once it loses exclusivity, and with Xiidra being the only branded dry-eye product on the market, we will not see competition for formulary positioning, so Xiidra should be able to maintain or even improve its overall formulary status,” in his view.

For Allergan, it’s not just a market battle. In a unique deal in September, the firm transferred Restasis patents to the Saint Regis Mohawk Tribe as a way of protecting them from challenges by would-be generic competitors. The move brought government scrutiny. Allergan also has sued San Diego-based Imprimis Pharmaceuticals Inc., which said in October it was making compounded cyclosporine-based formulations available for physicians to consider prescribing as customizable and potentially lower-cost alternatives to Restasis.

“Imprimis will aggressively defend itself against Allergan’s frivolous lawsuit and will take action against Allergan to protect its good name, never yielding to Allergan’s tactics to limit patient choice and drive up the cost of ophthalmic therapies to Americans,” the company said in a statement. “Allergan, one of the most powerful big pharma companies in the world, has filed this lawsuit against one of the smallest pharmaceutical companies in the world, to snuff out any competition to its high drug price strategies. Allergan, a true Goliath, is bent on ensuring that Americans continue to pay the highest possible prices for its drugs.” Allergan, for its part, said Imprimis does “not follow the established compounding regulations, engage[s] in false and misleading advertising, and ultimately, put[s] patients and physicians at risk by selling unapproved new drugs.”