5 Biotechs That Can Win From Ophthalmology Innovation

Joshua Schimmer, MD of Piper Jaffray attended the Ophthalmology Innovation Summit (OIS), noting that he was "impressed" with the improving basic science and understanding of the eye's structure, biology and function. The analyst also noted that there are many companies that are "poised to address the variety of unmet needs" across various ophthalmic indications. "Overall, we believe that ophthalmology broadly offers investors many compelling investment opportunities, though careful analysis of a company's approach is necessary given some of the inherent challenges in ophthalmology drug development," Schimmer argued. The analyst continued and singled out five companies that are all "well positioned" to "capitalize on the innovation." The names include: 1

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Schimmer offered the following highlights from the conference: 1.

"a small investigator-sponsored trial presented data in heavily anti-VEGF pretreated patients showed promising results, with impressive visual acuity gains (20 letters) believed to stem from the ability to resensitize the retina to antiVEGF-A or even an anti-fibrotic mechanism." 2.

"Both DRCR net Protocol T (study of Avastin, Lucentis and Eylea in DME) results demonstrating the superiority of Eylea in the lower baseline visual acuity subset and Protocol S (laser vs Lucentis in PDR) results were presented." The analyst also noted: "Regeneron's Eylea continues to differentiate its profile with some specialists believing that the Protocol T results suggest either broader anti-VEGF activity or tighter binding are contributing to the drug's broadly more potent effect which manifests in the lower baseline visual acuity patients, but may be extrapolated to other indications where anti-VEGF is used." 3.

"Many companies in ophthalmology are focused on sustained release of anti-VEGF (back of the eye) or glaucoma medications, both areas of high unmet need that are likely to only accelerate as the population ages and more medications are required." 4.

"Presenters noted that more than 250 unique genes have now been identified in various inherited retinal diseases. In addition, investigators from the RPE-65 Phase 3 trial presented additional visual acuity data, which appear fairly compelling, adding to what we believe is an already robust profile." 5.

"There are significant challenges facing companies across ophthalmology indications including noisy endpoints (e.g, visual acuity, IOP, etc.), unpredictable control arms (looking at you, Timolol), and in cases like wet-AMD, a relatively high standard of care in anti-VEGF therapy. That said, we are optimistic that new programs are taking thoughtful approaches that should increase the predictability and garner increased investor interest."