Allergan Inc. is making a big bet on fighting blindness.
The maker of Botox and eye drugs last week signed a pair of development deals with Switzerland-based Molecular Partners AG for eye-disease treatments.
Allergan will pay Molecular $62.5 million in combined upfront payments, with terms providing for possible additional milestone payments of up to $1.4 billion.
Allergan and privately held Molecular are working on developing biologic products for treating wet age-related macular degeneration, which can cause blindness.
Age-related macular degeneration, which usually occurs in people 50 years of age and older, affects about 1.75 million people in the United States, according to the National Institutes of Health’s National Eye Institute.
NIH estimates the number of people who have the disease will increase to almost 3 million by 2020.
“[Allergan] is committed to developing new treatments for serious eye diseases like AMD,” Chief Scientific Officer Scott Whitcup said.
Whitcup added that the company was looking forward to further develop a therapy that blocks growth factors “as a potential way to improve vision in patients with wet AMD.”
Allergan is “the ideal partner to generate a strong pipeline of (protein-based) drug candidates with the goal to treat retinal and other severe ocular diseases,” said Christian Zahnd, Molecular’s chief executive.
Allergan’s agreements with Molecular could be seen as part of the company’s previously announced emphasis on spending money “in the clinic.”
The drug maker, which has annual sales of more than $5 billion, has said it will spend close to $1 billion this year on research and development.
“Of course, to fuel all of this requires a lot of money,” David Pyott, Allergan’s longtime chief executive, said at Allergan’s research and development day this year.
Allergan has said it expects to spend 16% of its projected full-year sales of $5.65 billion to $5.8 billion on research and development. That translates to about $920 million.
The market seemed to react indifferently to the Allergan-Molecular pacts. The company’s shares closed up 2% on Aug. 21 when the deals were announced and there were no new analyst reports afterward.
Exclusive Pact
One of the Allergan-Molecular pacts is an exclusive license agreement for the design, development and commercialization of a therapy for wet age-related macular degeneration.
The therapy, MP0260, works by inhibiting proteins known as vascular endothelial growth factor A and platelet-derived growth factor B that drive abnormal vessel growth, according to the two companies.
Allergan and Molecular said in a press release that they will develop MP0260 through what Molecular called “human proof of concept.”
At that point, Molecular has the option of co-funding Allergan’s development costs in exchange for “a significant royalty step up,” they said.
They noted that the other agreement involves a discovery alliance in which Allergan and Molecular will design and develop proteins to fight selected targets implicated in serious eye diseases.
Allergan has the right to exercise three options to license collaboration compounds for ophthalmology exclusively during the research phase, according to the press release.
It noted that Allergan will pay Molecular an option exercise fee and be solely responsible for all downstream development, manufacturing and commercialization activities under the second deal.
Allergan and Molecular are addressing the wet form of age-related macular degeneration, which is less common but is more severe. There is also a dry form of the disease.
Roche Holding AG of Basel, Switzerland, sells Lucentis, an antibody fragment with Food and Drug Administration approval for wet age-related macular degeneration.
Avastin, a product of Roche and its Bay area biotech unit Genentech, also has been used on an off-label basis for treating the disease.
Analysts at Leerink Swann LLC and Stifel, Nicolaus & Co. have estimated that Avantin represents about 67% of wet age-related macular degeneration treatments.
