Novartis (NVS) announced that it signed a license and commercialization agreement with Ophthotech Corporation.
As per the terms of the agreement, Novartis will acquire exclusive rights to Fovista from Ophthotech for an upfront fee of $200 million along with milestone payments in the U.S. while Ophthotech will hold the marketing rights to Fovista in the U.S.
In addition, Novartis will pay royalties to Ophthotech for Fovista sales outside the U.S.
We note that Fovista is being evaluated with other anti-VEGF agents for the treatment of patients suffering from wet age-related macular degeneration (wet AMD).
Moreover, Novartis will also develop a co-formulation of Fovista with its proprietary anti-VEGF treatment.
It was observed in phase II studies that the combination therapy of Fovista and Lucentis significantly improved baseline visual acuity in wet AMD patients.
We note that Novartis' Lucentis is approved for four ocular indications in over 100 countries - wet age-related macular degeneration (wet AMD), visual impairment due to diabetic macular edema (:DME), visual impairment due to macular edema secondary to retinal vein occlusion (:RVO), and visual impairment due to choroidal neovascularization secondary to pathologic myopia (myopic CNV).
Novartis has a collaboration agreement with Roche’s (RHHBY) Genentech for Lucentis. While Roche holds the commercial rights for Lucentis in the U.S., Novartis holds the rights to develop and market Lucentis outside the U.S.
The acquisition of Fovista will strengthen Novartis' ophthalmology pipeline which includes candidates like RTH258 for wet AMD (next generation anti-VEGF), and LFG316 for the treatment of dry AMD.
Novartis currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the pharma industry include Shire (SHPG) and Allergan (AGN). While Shire holds a Zacks Rank #2 (Buy), Allergan is a Zacks Rank #1 (Strong Buy).