Eyetech Jumps on FDA OK

Eyetech Pharmaceuticals ( EYET) shares jumped early Monday after the company and its partner Pfizer ( PFE) won regulatory approval late Friday for their vision loss treatment.

The companies will soon begin marketing a drug that analysts say offers the best chance for limiting vision loss caused by a disease that primarily affects people 50 and older.

The drug is called Macugen, and the disease is called wet age-related macular degeneration, or AMD, which is becoming more prevalent as our population ages. The Food and Drug Administration approved the drug Friday night by granting it the widest possible use for treating wet AMD, also known as neovascular AMD. The companies say the drug will be available during the first quarter of 2005.

Eyetech shares jumped $3.65, or 8%, to $49.15 in premarket trading. Pfizer's were up 5 cents, or 0.2%, to $25.80, in the wake of its warning that its painkiller Celebrex posed increased cardiovascular risks during testing as a cancer treatment.

Macugen is the first in a line of potential new products being developed for a disease whose treatments are few and modestly effective. Macugen isn't a cure. It doesn't restore lost eyesight, but it helps preserve vision and helps limit progression of wet AMD to legal blindness.

Macugen is the first commercial product for Eyetech, which was founded in 2000 and went public at $21 a share earlier this year.

Macugen also provides some good news for embattled Pfizer, which signed a marketing and development deal with Eyetech in 2002. As part of that deal, the FDA approval means Eyetech will receive a $90 million milestone payment from Pfizer and Pfizer will buy $15 million of Eyetech's shares within 35 business days.

Macugen treats a disease that is the "leading cause of irreversible severe vision loss in patients older than 50 years of age in developed countries," the companies said Friday. The disease affects some 1.6 million Americans and is adding new U.S. patients at the rate of 200,000 a year, they added.

Wet AMD is caused by an overgrowth of new blood vessels in the macula, which is part of the retina and enables fine detailed vision. When these vessels leak blood or fluid, the macula bulges. That causes distorted vision and a decrease in central vision, often leading to legal blindness if the disease attacks both eyes.

(There is another type of age-related macular degeneration called dry AMD. It affects about 13.4 million Americans and is less severe than wet AMD. However, there is no treatment for dry AMD, and Macugen isn't approved for this disease.)

Macugen is the first in a new class of eye care drugs to inhibit the activity of vascular endothelial growth factor, or VEGF, a protein that plays a key role in developing the unwanted blood vessels. By blocking VEGF, the drug can stop the growth of runaway blood vessels before they can spread and leak. Macugen must be injected into the eye every six weeks.

Macugen also is the first therapy indicated for the treatment of all types of wet AMD. Until now, the only FDA-approved drug treatment was designed for one type of wet AMD that accounts for perhaps one-fourth of the affected patients.

This other treatment requires the intravenous injection of Visudyne, a drug made by QLT ( QLTI) and Novartis ( NVS).The drug is administered every six months.

Visudyne chemically sensitizes the eye, which is then exposed to infrared light, also known as a cold laser. This therapy stops unwanted blood vessels from leaking. It doesn't restore lost vision and it doesn't stop the development of new blood vessels. Called photodynamic therapy, this treatment must be repeated every three to four months.

Another treatment involves using a thermal laser to cauterize the unwanted blood vessels in the eye. This laser leaves a permanent blind spot where AMD has already damaged the eye. Thermal lasers don't stop new blood vessels from developing; they don't restore lost sight. Visudyne and Macugen don't cause blind spots.

Genentech ( DNA) also is developing a VEGF-type drug for wet AMD. The drug, called Lucentis, is in late-stage clinical testing and must be injected into the eye every four weeks. Genentech is collaborating with Novartis.

A company working on a different type of wet AMD drug is Alcon ( ACL), which submitted its application to the FDA on Thursday. Alcon's drug is called Retaane.

The Swiss drug and device company announced in mid-October that a key test of Retaane showed no difference from the QLT-Novartis photodynamic therapy. At the time, Alcon vowed it would seek FDA approval by year-end, saying there were "controllable factors" in the clinical trial that "negatively impacted the overall results" of its study.

Retaane is a steroid that fights the development of new, unwanted blood vessels. Retaane is administered every six months. Instead of being injected into the eyeball, Retaane is delivered via a tube directly in contact with the outer surface of the sclera, the fibrous outer envelope that covers much of the eyeball. Alcon is hoping this approach will give Retaane a marketing edge over Eyetech's drug.

Other companies working on wet AMD treatments include Genaera ( GENR), Iridex ( IRIX) and Miravant Medical Technologies ( MRVT).

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