Pharmacia & Upjohn will make a $19 million equity investment in Miravant Medical Technologies and provide a $22.5 million line of credit, in exchange for control of the clinical and regulatory aspects of their joint ophthalmic programs, including a photodynamic therapy in Phase III trials for age-related macular degeneration (AMD).
The move "has nothing to do with the 1995 agreement" made between the companies, said Tom Herrick, manager of investor relations for Santa Barbara, Calif.-based Miravant. "This is a whole new arrangement, and we are not disclosing any details yet."
In conjunction with the line of credit, Pharmacia, of Bridgewater, N.J., will receive up to 360,000 warrants to purchase Miravant common stock. Miravant will use the line of credit to support its ophthalmology program, and for general corporate purposes.
Pharmacia owns 725,000 shares, or about 4.5 percent, of Miravant. With the additional purchase of common stock under the new agreement, the ownership stake will increase to about 11 percent.
The companies first collaborated in 1995, when PDT Inc. (now Miravant) granted Pharmacia an exclusive, worldwide license to the PhotoPoint drug SnET2 (tin ethyl etiopurpurin) - now in Phase III trials for AMD - in exchange for developmental funding, milestone payments and royalties.
PhotoPoint therapy uses light-activated drugs to target and destroy diseased cells. Light-activated drugs are inactive until switched on by low-power light of a specific wavelength, thus giving physicians the potential to target specific groups of cells and control the timing and selectivity of treatment. Diseased cells are destroyed with minimal damage to the surrounding normal tissue.
The first stage of the 1995 agreement called for a $25 million investment, including an equity purchase by Pharmacia. The potential value of the collaboration, excluding royalties, was estimated to be as high as $100 million.
SnET2 for AMD received the FDA's fast-track designation. Miravant is revealing no details of the trials, except to say that enrollment is taking place, with European trials also planned. Participants must be over 50 years of age; must have been diagnosed with the advanced, "wet" form of AMD; and must have had no previous laser treatment for AMD in the affected eye. Several hundred patients are involved.
AMD is the leading cause of blindness in adults. Although there seems to be a genetic link, the exact cause of the disease is unknown. An estimated 400,000 cases are diagnosed annually in the U.S. and Europe.
The "dry" form of the disease progresses slowly, and affects about 90 percent of all sufferers. The advanced - or wet form - occurs when blood vessels develop under the macula, which is on the retina.
"[AMD] affects the point of central vision," said Laurens Lichty, spokeswoman for Miravant. "It affects seeing straight ahead, your reading, your driving. A patient with wet AMD loses central vision and only has peripheral vision. It is rapidly progressing, tends to affect both eyes, and leads to legal blindness."
No treatment exists, but 10 to 15 percent of patients undergo hot laser treatments to cauterize parts of the eye to stop the leaking of blood vessels and other fluids, but the retina tends to be damaged in the process.
Herrick said vision is made "worse after you've had the treatment than before, so it's not a treatment that a lot of people are going for. The benefit of our photodynamic therapy is that it's a non-thermal laser light."
Phase II data suggested SnET2 therapy stops the hemorrhaging behind the retina and allows the retina to return to its normal state, Lichty said. "That's the breakthrough and we need this to be confirmed in Phase III trials," she said.
SnET2 is currently in Phase I trials for prostate cancer. Phase II/III studies for skin cancer were stopped when the two companies decided to focus efforts on AMD.
Miravant's stock (NASDAQ:MRVT) closed Tuesday at $14.50, down $0.375. n