ISTA Pharmaceuticals Inc. (ISTA), an ophthalmic pharmaceutical company faces a litmus test on June 26 as an FDA panel is slated to decide whether or not to recommend approval of the company's Bepreve eye drop treatment for ocular itching associated with allergic conjunctivitis.
The FDA is expected to make a final decision on Bepreve by September. The regulatory agency usually follows its panels' advice, though it is not required to do so.
Allergic conjunctivitis is the most prevalent of all forms of conjunctivitis and can be either seasonal or year-round in nature. Symptoms include itching, burning, increased production of tears and occasionally the sensation of a foreign body in the eye. It is estimated that millions of Americans suffer from some form of eye allergies.
According to research firm IMS Health, the U.S ocular allergy market generated $562 million in sales last year. Alcon Inc.'s (ACL) Patanol is widely used to treat allergic conjunctivitis and it logged sales of $272 million last year. ISTA's Bepreve, if approved could compete with Alcon's Patanol and Pataday. Patanol commands 48% of the ocular allergy market, while Pataday has a 27% market share, according to IMS data.
ISTA filed its New Drug Application for Bepreve (bepotastine ophthalmic solution) on November 13, 2008. According to ISTA, in phase III studies Bepreve demonstrated highly statistically significant reductions in the primary endpoints of ocular itching.
Bepotastine was approved in Japan for use as a systemic drug in the treatment of allergic rhinitis and urticaria/pruritus in July 2000 and January 2002, respectively and is marketed under the brand name Talion.
The drug was co-developed by Tanabe Seiyaku and Ube Industries, Ltd., who discovered bepotastine. In 2001, Tanabe Seiyaku granted Senju Pharmaceutical Co. Ltd., exclusive worldwide rights, with the exception of certain Asian countries, to develop, manufacture and market bepotastine for ophthalmic use. In 2006, ISTA licensed the exclusive North American rights from Senju to an eye drop formulation of bepotastine for the treatment of allergic conjunctivitis.
ISTA has three drugs on the market -- Xibrom for the treatment of ocular pain and inflammation associated with cataract surgery; Istalol to relieve high eye pressure or chronic open angle glaucoma and Vitrase for vitreous hemorrhage. The company's marketed products continue to gain market share and all the three products were the No.1 in their respective markets during the first-quarter of 2009.
The company has been expanding its footprint in Ophthalmology and its rich pipeline is a proof for it. ISTA has nine products under development including Bepreve that is awaiting the FDA panel decision.
ISTA remains on track to meet its timeline expectations for the final development of two of its investigational products -- Xibrom QD and T-Pred, with clinical results expected in the second half of 2009 for both products. Xibrom QD is the once-daily formulation of Xibrom. T-Pred, which has been at the altar earlier, was rejected by the FDA in May 2007 for lack of sufficient clinical information to approve the drug as a treatment for eye inflammation.
Early this year, the company announced preliminary, positive phase II results for Ecabet sodium for dry eye. As recently as June 8, ISTA reported positive results from a proof-of-concept phase II clinical study in subjects with dry eye disease using a new, proprietary, low-dose formulation of Bromfenac, the active ingredient in Xibrom 0.09%.
ISTA Pharmaceuticals was formerly known as Advanced Corneal Systems Inc. and changed its name to ISTA Pharmaceuticals, Inc. in March 2000. ISTA is a Native American word, which means "the eye". The company went public in August 2000 pricing its IPO at $10.50 a share.
In the first-quarter ended March 31, 2009 net loss widened to $19.6 million or $0.59 per share from $13.85 million or $0.42 per share in the year-ago quarter, hurt by warrant valuation expenses. The company has incurred losses since inception and had an accumulated deficit of $358.7 million through March 31, 2009.
The operating loss for the first-quarter of 2009 narrowed to
$4.4 million from $12.1 million in the year-ago quarter.
ISTA's net product sales were about $20.3 million during the recent first-quarter, up from $15.4 million in the comparable year-ago period. The company credited the higher revenue to increased growth in prescription levels and market share, particularly for Xibrom, its highest gross margin product.
Xibrom sales totaled $15.7 milllion and Istalol generated sales of $3.6 million during the first-quarter of 2009, both representing 33% growth over the comparable year-ago quarter. Vitrase notched up $1 million in sales during the quarter, compared to $0.9 million in the year-ago quarter. The company sees no generic threat to its top drug Xibrom twice-daily until the second-half of 2010.
ISTA remains comfortable with the full-year 2009 net loss outlook of $7 million to $10 million, excluding warrant valuation expense. ISTA continues to expect net revenue for the year to range between $92 million and $97 million. The company expects research and development expenses for the full year of 2009 to be about $20 million to $25 million. Gross margin for the year is expected to be 70% -73%.
As of March 31, 2009, the company had approximately $52.0 million in cash and working capital of $26.8 million. Cash at the end of the year is anticipated to be $35 million-$45 million.
ISTA shares have been trading in the range of $0.29-$4.00 for the past twelve months. The stock closed Thursday's trading session at $3.93, up 1.29% on a volume of 339,200 shares.
Given the positive feedback from the ophthalmology and allergy communities on the Bepreve data presentations, analysts believe that the odds are high for the drug's approval and it is worth keep an eye on ISTA. But having said that, it's not over until it is over. Stay tuned.
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