InSite Vision Inc. initiated patient enrollment in two Phase III trials of its lead drug, AzaSite, to treat bacterial conjunctivitis, commonly known as "pink eye."

The company received FDA approval for the pivotal protocol last year, but just raised $16.5 million in a private placement in June to help cover the expenses. (See BioWorld Today, Jan. 17, 2003, and June 3, 2004.)

"We couldn't start the Phase III trials until we got the funding, and we have the funding now," said Lyle Bowman, vice president of development and operations at the Alameda, Calif.-based company.

AzaSite contains the antibiotic azithromycin, which is formulated with InSite's DuraSite drug delivery vehicle. DuraSite offers a prolonged release, allowing for a low-dosing regimen. Azithromycin currently is used to treat a variety of bacterial infections. New York-based Pfizer Inc. markets it as Zithromax.

While InSite has a glaucoma genetic test on the market, as well as certain co-exclusive rights to the approved dry-eye drug AquaSite from CIBA Vision Ophthalmics, AzaSite would represent the company's first approved drug developed in-house. It could reach the market in 2006, taking a share of the $1-billion-a-year ocular anti-infective market, said David Heniges, the company's vice president and general manager of commercial opportunities.

"We're very focused on this opportunity, understanding that the time to market and the market potential, both in the U.S. and outside of the U.S., is significant," he told BioWorld Today, "and therefore, it remains the primary opportunity that the company is currently pursuing in terms of allocation of its resources."

The Phase III trials will both focus on the two endpoints of clinical cure and microbiological eradication. The first study will enroll 550 patients, dosing some with a vehicle and the others with 1 percent AzaSite. The second Phase III trial will enroll 775 patients, comparing 0.3 percent of the antibiotic tobramycin with 1 percent AzaSite.

The trials are large because the company needs data from patients who are culture positive for acute bacterial conjunctivitis, not from those who merely exhibit the symptoms.

"By just looking at the eye, an ophthalmologist can't tell what's causing it," Bowman said.

Of the patients enrolled in the first and second trial, 224 and 310 of them, respectively, must be confirmed culture positive for acute bacterial conjunctivitis in at least one eye.

InSite holds all rights to its AzaSite product and intends to file for regulatory approval and launch it after azithromycin comes off patent next year. The company has talked with a number of potential marketing partners, but is holding off on a deal until it is further along in the Phase III studies, making a license to the product more valuable.

"We certainly haven't ruled out taking it to the marketplace ourselves," Heniges said, "but clearly our intent and our desire is to find a corporate partner that has the infrastructure and the resources to realize the potential of this particular opportunity."

The drug's largest advantage over its competitors - fluoroquinolones, tobramycins and other aminoglycosides - is the reduced seven-drop dosing regimen, Heniges and Bowman said.

"Certainly when you treat children, you don't want an extended dosing regimen because of compliance issues," Heniges said.

Phase II data of AzaSite announced in September 2002 show it was a safe and effective treatment of bacterial conjunctivitis with seven drops over a five-day period. Conjunctivitis is an inflammation of the conjunctiva, a delicate lining that covers the eyelid and part of the outer surface of the eyeball. It usually is caused by bacteria, a virus or an allergy. Symptoms include itchy, burning or teary eyes.

InSite believes AzaSite could be expanded into other eye indications, such as blepharitis and trachoma, and it could be used in the development of an antibody-steroid combination product designed to reduce inflammation and to treat infection.

Aside from AzaSite, the company is conducting genomic research using TIGR and other genes to find treatments for glaucoma. Part of the research has been incorporated into its marketed Ocugene glaucoma genetic test. It also is working on ISV-205, which is designed as a treatment for glaucoma to be used in conjunction with Ocugene.

In addition to starting enrollment in the AzaSite Phase III program on Wednesday, InSite announced its second-quarter results. It reported a net loss of $1.5 million, or 4 cents per share, compared with a net loss of $1.9 million, or 8 cents per share, for the same time period last year.

The company had an increase of research and development expenses for its preparations to begin the Phase III AzaSite clinical trials and for personnel-related expenses. It posted the expenses at $1.4 million, compared to $1.2 million for last year's second quarter.

As of June 30, the company had cash and cash equivalents of $11.9 million.

Its stock (AMEX:ISV) dipped 4 cents Wednesday to close at 49 cents.

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