NEW YORK (AP) -- Shares of Regeneron Pharmaceuticals Inc. sank Wednesday after a competitor reported positive clinical trial results for an eye drug that might eventually compete with Regeneron's Eylea.
THE SPARK: Privately-held Ophthotech Corp. is studying its drug Fovista as a treatment for "wet" age-related macular degeneration, a common cause of blindness. Regeneron's drug Eylea and Roche's drug Lucentis are used to treat the same condition. Ophthotech said Wednesday that in a mid-stage clinical trial, patients who were treated with a combination of Fovista and Lucentis had a greater improvement in their vision than patients who were injected with Lucentis alone.
The Princeton, N.J., company said Fovista is the first experimental drug that worked better than Lucentis in a clinical trial.
THE BIG PICTURE: The Food and Drug Administration approved Eylea in November. Sales have been surprisingly strong, and Regeneron says it expects $500 million to $550 million in revenue from the drug in 2012. It is the Tarrytown, N.Y., company's main source of revenue.
Eylea is the first drug approved for "wet" AMD since Lucentis in 2006. Annual sales of Lucentis are about $1.5 billion, and analysts say Eylea may be more convenient because patients don't have to visit their doctors as often for additional injections and checkups.
Roche's drug Avastin is also used as a treatment for the condition, although it does not have formal marketing approval.
Ophthotech said Wednesday that it will speed up late-stage development of Fovista, but the drug must go through larger and longer trials before it is approved. The company said it believes Fovista could work in combination with drugs like Lucentis and Eylea.
THE ANALYSIS: Jefferies & Co. analyst Biren Amin said Regeneron may start negotiations with Ophthotech, since he believes Ophthotech will look for a partner to help develop Fovista. Amin said a regimen of Eylea and Fovista might lead to fewer injections, meaning fewer side effects for patients.
Regeneron Pharmaceuticals said it does not comment on market speculation or its business development activities.
SHARE ACTION: Shares of Regeneron Pharmaceuticals lost $10.63, or 8.3 percent, to $117.22. The shares have more than doubled in value since Eylea was approved.