Ista Pharmaceuticals Inc. thinks its new drug is nothing to sneeze at.
The eye drug maker will introduce Bepreve, a prescription drug for treating itchy eyes from allergies, in the fourth quarter, Chief Executive Vicente Anido Jr. said.
The Food and Drug Administration earlier this month approved Bepreve, which Anido calls a “huge, major revenue driver.”
The company could double its sales through Bepreve, according to Anido.
“We’re just now beginning to enter a huge—what I think is going to be explosive—growth phase,” he said.
Besides Bepreve, Ista has drugs to treat eye inflammation and dry eye in its pipeline.
Ista plans to grow its sales force from 103 to more than 160 to help launch Bepreve, Anido said. The drug maker is hiring salespeople and expects the majority of its sales territories filled at the end of the year.
Wall Street appears to like what Ista is doing—its shares are up more than 550% so far this year with a recent market value of $160 million.
Ista shares fell 90% last year and 30% in 2007 after some clinical trial and regulatory setbacks.
Ista was kept afloat by funding of up to $65 million from investors Deerfield Capital Management LLC, the Sprout Group and Sanderling Ventures, which put “a huge safety net” under it, Anido said.
“The financing changed the whole atmosphere inside the company,” he said. “Our stock had been beaten up so terribly (and) we had rough going with the FDA in ’07 and ’08.”
But things are changing on the back of Bepreve.
The drug will allow Ista to enter the prescription eye allergy market, which is more than twice as large as Ista’s traditional glaucoma and post-surgical pain markets and is valued at around $600 million yearly. The move into this market could push Ista into the $100 million sales mark this year.
Analyst Frank Pinkerton of Atlanta investment bank SunTrust Robinson Humphrey said in a research note that he expects Bepreve to have $1.5 million in sales during the fourth quarter, $16 million in 2010 and $50 million by 2012.
But Ista won’t have a corner on the itchy eye market.
Besides Alcon Inc.’s Patanol and Pataday, Bepreve will face off against two major prescription allergy drugs that will be going off patent soon.
Those are Optivar, from Meda Pharmaceuticals Inc. of Somerset, N.J., and Elestat, from North Carolina-based Inspire Pharmaceuticals Inc.
Inspire co-promotes Elestat with Irvine drug maker Allergan Inc., an Ista rival.
Bepreve will be sold to general ophthalmologists, optometrists and allergists.
Profit Projection
Pinkerton has projected that Ista could turn a profit in the fourth quarter of this year, as well as have a $5.6 million profit on sales of $132 million in 2010, largely on the launch of Bepreve.
Ista posted a narrowed operating loss of $1.6 million on revenue of $24 million in the second quarter. It hiked revenue guidance to $95 million to $100 million for the third quarter from a previous $92 million to $97 million, citing its “strong” second quarter. The drug maker’s loss forecast remained unchanged at $7 million to $10 million.
Wall Street expects Ista to lose $7.6 million on sales of $102 million this year.
Ista’s drug roster also includes Istalol, a glaucoma drug, Xibrom, a drug to treat pain after cataract surgery, and Vitrase, which is used as a spreading agent for other drugs.
Ista expects to have a once-daily formula of Xibrom, which now accounts for 76% of its revenue, available in the middle of 2010. That formulation will give the drug maker another three years of patent protection, according to Anido.
Meanwhile, Anido said that a generic formulation of twice-daily Xibrom hasn’t yet emerged. That version of Xibrom lost patent protection earlier this year.
“We don’t expect a generic for Xibrom to come out until sometime in 2011,” Anido said.
He said to his knowledge, there’s been no drug master file submitted at the FDA for twice-daily bromfenac, Xibrom’s generic name.
The delay, Anido said, gives Ista “plenty of time” to have its customers switch their patients from the twice-a-day to the once-daily Xibrom formula.
Ista’s “done a good job of positioning its sales force before physicians and aggressively promoting its products” despite going up against much larger competitors such as Allergan, Alcon, Abbott Laboratories of suburban Chicago and Switzerland’s Novartis AG, Pinkerton said.
Going forward, Anido said he expects Ista to remain independent rather than being bought. Antitrust concerns keep Allergan and Alcon, potential suitors, at bay.
But analyst Pinkerton suggested that Ista could be attractive to a larger buyer sooner than later.
“In our view, the ophthalmology sector remains in consolidation mode, and Ista is one of the few assets with both existing pharmaceutical sales and a pipeline,” he said.
