Washington Editor

Expanding its late-stage product pipeline, ISTA Pharmaceuticals Inc. in-licensed exclusive U.S. rights to ecabet sodium, a drop for dry eye syndrome (keratoconjunctivitis sicca, or KCS).

The Irvine, Calif.-based company acquired the product rights from a familiar overseas associate, Senju Pharmaceuticals Co. Ltd. ISTA has in-licensed two other products from the Osaka, Japan-based company, which is testing ecabet sodium in Phase II trials in its home country. The product already is marketed there as an oral agent for gastric ulcers and gastritis.

"We did say that we wanted to continue to add to our pipeline," ISTA CEO Vicente Anido told BioWorld Today. "We have two products approved and are hoping for a third one coming up next year. So in order to be able to sustain growth, we have to be able to fill up the pipeline, and this is the first step toward that."

ISTA's near-term plans for the product call for completing a final Phase IIb study by the first half of next year, and, pending positive results, beginning Phase III testing immediately after. The Phase IIb study will evaluate the drug vs. placebo, as measured by six or seven endpoints. Those endpoints will guide the company in planning two Phase III trials. Costs of those studies will fall on ISTA's shoulders.

Terms of the deal include up-front and milestone payments worth a total of $3 million to Senju, which also is eligible for eventual royalties of an undisclosed rate. In addition to paying for clinical trials, ISTA also is responsible for the preparation and submission of a new drug application, as well as for manufacturing, marketing and sales in the U.S. The company already is manufacturing the product for its Phase IIb trial.

"This is a partner that we know well," Anido said. "The product's activity has already been proven outside of ophthalmology, so we do know the activity of the drug and that it works."

As a result, the company faces little in the way of uncertainty as to ecabet sodium's development. ISTA, which said it would spend between $14 million and $16 million on research and development this year, noted that costs associated with the in-license of ecabet sodium would not add to that.

Both companies expect to aid in one another's research efforts, as Senju and ISTA will continue to interact on the product's development as it moves forward in both the U.S. and Japan.

Ecabet sodium is designed to treat dry eye patients who have evaporative tears. Its stimulating action on mucin secretion is expected to improve the overall quality of tears. Specifically, it is designed to increase the quantity and quality of mucin produced by conjunctival goblet cells and corneal epithelia.

That patient population also is the focus of Inspire Pharmaceuticals Inc.'s diquafosol, which the Durham, N.C.-based company has in Phase III development. Anido said most drugs in development for dry eye are focused on the evaporative-tear problem. A dry eye product already on the market, Allergan Inc.'s Restasis, is targeted to help those who cannot produce tears.

Anido said the overall dry eye market should grow to between $500 million and $700 million within three to five years, which would make it the third-largest segment of ophthalmology behind glaucoma and macular degeneration. ISTA expects ecabet sodium to eventually top the $100 million sales mark.

"It's critical that we play in as many of these spaces as possible," Anido said. "We do have an entry in glaucoma, and we now have an entry in the dry eye space."

ISTA already has two products on the market, including Istalol, a once-daily topical solution of timolol. It is used for glaucoma, and also was in-licensed from Senju. Another ISTA product with roots at Senju is Xibrom (bromfenac sodium ophthalmic solution), a topical, twice-daily, non-steroidal anti-inflammatory solution under FDA review for use in ocular inflammation, eye pain and photophobia following cataract surgery.

ISTA's other marketed product is Vitrase (hyaluronidase for injection; lyophilized, ovine), a spreading agent used to facilitate the dispersion and absorption of other drugs. The company recently regained rights from Allergan, also of Irvine, to the product's use in back-of-the-eye indications, such as vitreous hemorrhage and diabetic retinopathy. A new drug application for vitreous hemorrhage produced an approvable letter from the FDA that asked ISTA to further analyze existing data. (See BioWorld Today, April 8, 2003.)

"We've been clearing up a lot of issues that were in the approvable letter," Anido said. "We cleared up all the CMC stuff, which is how they approved the product for the spreading agent indication."

The data re-analysis showed that diabetic vitreous hemorrhage patients fared better on the drug than other vitreous hemorrhage patients. About 70 percent of patients in the study were diabetic. ISTA, which also established that the drug's peak efficacy hits 56 days after injection, has requested FDA approval on the more specific data. There is no timeline fixed to any regulatory action.

Earlier this year, the company raised $13.3 million that it planned to spend on regaining full rights to Vitrase and for in-licensing another product, which turned out to be ecabet sodium. (See BioWorld Today, Aug. 9, 2004.)

On Thursday, ISTA's stock (NASDAQ:ISTA) fell 76 cents to close at $11.04.