Eyetech Pharmaceuticals

( EYET) faces an important regulatory test Aug. 27 when a Food and Drug Administration advisory panel will review Macugen, the company's experimental drug intended to treat an eye disease that is one of the leading causes of blindness among older people.

As is the case with every FDA advisory committee meeting, Eyetech has a lot riding on the panel's recommendation. The company went public in January at $21 per share. Today, the stock trades around $32. Investor attention for Eyetech has been driven largely by Macugen's commercial potential -- it will be the company's first market product, if approved -- and the fact that Eyetech will co-market the drug with pharmaceutical giant (and marketing powerhouse)

Pfizer

(PFE) - Get Report

.

Macugen is designed to treat the "wet form" of macular degeneration, a chronic, progressive eye disease that is the leading cause of vision loss and blindness in people over 50. In the U.S., Eyetech estimates that there are more than 1.6 million people suffering from wet macular degeneration, with approximately 200,000 new cases diagnosed every year.

Currently, Canadian drugmaker

QLT

(QLTI)

, and partner

Novartis

(NVS) - Get Report

, sell the only approved treatment for wet macular degeneration, a product called Visudyne. But Visudyne, with worldwide sales of $357 million in 2003 and projected 2004 sales of $420 million, is only approved in the U.S. for classic wet macular degeneration, the smallest of the three subtypes of the disease, accounting for 25% of all cases. Eyetech is seeking Macugen approval for all three subtypes (classic, minimally classic and occult), which would give the drug a significant marketing advantage.

But of course, Eyetech has to get Macugen past FDA regulators first, which is why the Aug. 27 advisory committee, and its recommendation up or down for approval, will be so important.

Eyetech conducted two randomized and controlled clinical studies of Macugen, enrolling a combined 1,190 patients. The studies tested three different doses of Macugen, comparing them to a placebo. At the lowest Macugen dose (and the dose for which Eyetech is seeking approval) the drug was able to delay or slow the loss of vision in 70% of patients, compared to 55% of patients in the control arm -- a statistically significant difference. Moreover, Eyetech says the positive results were consistent across all three subtypes of wet macular degeneration.

Whether or not the FDA agrees with Eyetech's analysis of the Macugen clinical trials will be known when the agency's review is made public on Thursday, Aug. 26, the day before the panel meeting. (You'll be able to find the FDA briefing documents

here

.) Potential issues include the fact that Eyetech has only disclosed pooled efficacy and safety data from its two Macugen studies. It's likely, however, that the FDA will pull the studies apart and analyze them individually to see whether each supports Macugen's approval.

Given that Eyetech and Pfizer are seeking Macugen's approval for all three subtypes of wet macular degeneration, it will be important to hear whether the FDA and its advisory panel members believe the data support such a broad label.

From a commercial standpoint, the views of the advisory panel members, especially practicing physicians, will provide some insight into how Macugen will stack up against the currently approved treatment, Visudyne. From an efficacy standpoint in terms of slowing vision loss, the two products are very similar. But the two drugs are administered differently and have different side effect profiles. Visudyne is given intravenously, then activated using a low-power laser directed at the eyes. Macugen is administered with an injection directly into the eye, with no other step necessary. Neither treatments cure the disease, requiring patients to undergo periodic retreatment.

The First of Many

Behind Visudyne and Macugen are a gaggle of other drugs being developed for wet macular degeneration from the likes of

Genentech

( DNA), Swiss drugmaker

Alcon

( ACL) and small biotech firms

Genaera

(GENR)

and

Miravant Medical Technologies

(MRVT.OB)

.

Wet macular degeneration occurs when blood vessels in the tissues of the eye beneath the retina begin to grow abnormally. These new blood vessels break, leaking fluid and blood into the macula, or the center region of the retina. If left untreated, the macula becomes scarred, and patients gradually lose their vision.

Macugen is a strand of nucleic acids that is designed to block a protein in the body called vascular endothelial growth factor, or VEGF, that promotes the growth of new blood vessels. By blocking VEGF, Macugen prevents or slows the growth the abnormal blood vessels in the eye that lead to macular degeneration. Genentech's new cancer drug Avastin takes the same approach to fighting colon cancer; its experimental macular degeneration drug, Lucentis, is actually a modified form of Avastin.

Visudyne takes a different approach to fighting the disease, destroying newly grown blood vessels in the eye after they've already formed.

As originally published, this story contained an error. Please see

Corrections and Clarifications.

Adam Feuerstein writes regularly for RealMoney.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

adam.feuerstein@thestreet.com.