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OSI Completes Eyetech Acquisition
Acquisition Expands the Company's Drug Portfolio.

In a controversial deal that raised eyebrows on Wall Street when it was first announced in August, OSI Pharmaceuticals, Inc. has completed its acquisition of Eyetech Pharmaceuticals, the developer of the wet AMD therapy Macugen. The final price was approximately $650 million, or about $18 for each Eyetech share in cash and OSI stock.

Though Macugen is the first drug approved for all subtypes of wet AMD, has "first mover" advantage in the marketplace, and has been rapidly accepted by retina specialists, the highly impressive clinical trial results achieved by a potential competitor, Genentech's Lucentis, led analysts and OSI shareholders to question the wisdom of the acquisition. OSI shares dropped about 20%, from about $40 to $32, on the day the deal was announced, and the shares continued to fall until they reached a low of about $21 in October. Since then, OSI shares have recovered somewhat.

Some analysts also wondered why OSI would want to be in competition with Genentech, as the two companies are partners on OSI's only other approved drug, Tarceva, a treatment for advanced non-small cell lung cancer and pancreatic cancer.

OSI said it undertook the Eyetech acquisition as a way to diversify the company's drug portfolio and participate in three high-growth areas: oncology, diabetes and ophthalmic drugs.

In a conference call just after the deal was first announced, Colin Goddard, Ph.D., the CEO of OSI Pharmaceuticals, said that the company could justify the acquisition even if Macugen eventually accounted for a relatively small share of the market for wet AMD drugs. He also noted that Macugen is being studied for additional indications, including diabetic macular edema and retinal vein occlusion.

Sales of Macugen would also benefit if the approval of Lucentis, widely expected sometime in 2006, is delayed or for some reason does not occur. Macugen would also benefit if Lucentis is approved for limited indications.

Eyetech shares traveled a bumpy road following the initial public offering at $21 a share in 2004. The stock reached a peak of $49 when Macugen was approved by the FDA in late 2004, but then began a steep decline as the threat of Lucentis loomed ever larger. When OSI made its offer to buy Eyetech in August, Eyetech shares were trading at about $14.

Eyetech's marketing partner for Macugen, Pfizer, stood aside and did not enter a bid for Eyetech as the OSI deal progressed toward completion. Pfizer, which owned 8.9% of Eyetech, had paid as high as $43.60 for at least some of its Eyetech shares, though it acquired most of its stake in Eyetech at much lower prices.

Genentech Seeks Early Lucentis OK
Approval Might Curtail Off-Label Avastin Use for AMD.

Genentech Inc. will not be granted fast-track status from the FDA for the Lucentis approval process, but the company says it may still obtain priority review for its treatment for wet AMD. The company is dropping one study from its submission to speed up the process on its own.

If priority review is granted, Lucentis could be approved as early as mid-2006.

Early approval of Lucentis would probably cause at least some of the retina specialists who are now using Genentech's colorectal cancer drug Avastin off-label to treat AMD to instead opt for Lucentis. Avastin, an antiangiogenic agent that is related to Lucentis, is being used intravitreally to treat wet AMD.

The FDA typically grants the fast-track label to products that address an unmet medical need. Because Macugen is already approved as a treatment for all forms of wet AMD, Lucentis could not be fast-tracked. The fast-track designation gives companies regular meetings with the agency to discuss development plans and allows companies to submit data relevant to the approval process as it becomes available instead of all at once.

Genentech hopes to expedite the Lucentis approval process by waiting to file data from an ongoing dosing study as supplemental data, said company spokesperson Dawn Kalmar. She said the company made the decision to leave out the dosing data before the application was denied fast-track status, adding that Genentech is "confident in the package that we've put together." A decision to grant "priority" 6-month review is made by the FDA after a Biologics License Application is submitted (typically after 45 days) and is based on results of the trials submitted.

Genentech is hopeful that Lucentis approval will curtail the off-label use of Avastin for AMD.

"We understand that the doctors using Avastin for AMD are doing it with noble intent, which is to help patients who are going blind as we speak," Charles Johnson, M.B., Ch.B., Genentech's vice president of biotherapeutics, told Ophthalmology Management. "However, there have been no safety and toxicity studies conducted on Avastin as an ophthalmic drug. We are well aware of the unmet need and are beginning a new phase 3 Lucentis dosing study (SAILOR) which will enroll 5,000 patients. This study is an avenue for more patients to have access to Lucentis now."

Dr. Johnson notes that the off-label intravitreal use of Avastin has increased because of advice generated by the retinal community.

"The retinal community is a close-knit, well-informed group that has excellent communication and is motivated to do the best they can for their patients," says Dr. Johnson.

When a retina specialist asks Genentech about using Avastin for AMD, the company responds with a package of relevant published data.

"We make educational material available to the doctors but we don't take a position," says Dr. Johnson.

IN THE NEWS

Synergetics in merger. Valley Forge Scientific Corp. and Synergetics, Inc., a manufacturer of instruments used in ophthalmic surgery, have merged. The combined company is now known as Synergetics USA and trades on the NASDAQ under the symbol SURG.

Missouri-based Synergetics USA designs, manufactures and markets medical devices for use in ophthalmic surgery and neurosurgery. The company's products are designed and manufactured to support micro or minimally invasive surgical procedures. In addition to the company's surgical devices and equipment, it also designs and manufactures disposable and nondisposable supplies and accessories for use with such devices and equipment. Synergetics USA sells its products primarily to hospitals, clinics and surgeons in approximately 70 countries.

By adding Valley Forge Scientific, the company now also manufactures medical devices for spine surgery, neurosurgery and pain control.

AVR starts blog. Advanced Vision Research (AVR), makers of the TheraTears brand of dry-eye products has launched the first dry-eye blog on the Web. Doctors and patients can now visit www.dryeyeblog.com. AVR has created the blog to provide doctors and patients with a useful way to keep up to date on the latest thoughts, news, research and information on dry eye. The company also hopes its blog will improve its ability to join customers' discussions, provide tips and insights and receive feedback.

Companies combine. Privately held Advanced Ocular Systems, Inc. (AOS) of Marblehead, Mass., has agreed to a merger with Regenera Limited of Perth, Western Australia.

The merger creates a new global ophthalmic company with a pipeline of refractive and retinal technology and products and emerging revenues from existing licensed products. The merged company is expected to assume the name Advanced Ocular Systems Limited and will be headquartered in Marblehead, with pharmaceutical research and development and administrative operations in Australia.

The AOS portfolio includes two IOL technologies licensed to Lenstec — the Tetraflex accommodative IOL for presbyopia in patients with cataracts, and the Tetraform phakic IOL for myopia and hyperopia. Tetraflex has European CE Mark approval and is now in clinical trials in the United States.

The portfolio also includes two corneal inlay technologies developed by Gholam Peyman, M.D.: Circular Lamellar Keratotomy inlays that Dr. Peyman developed for treating presbyopia and myopia, and photo-ablatable inlays for LASIK surgery.

The latter has the potential to facilitate retreatment in patients undergoing LASIK for myopia and hyperopia and extend the use of LASIK to patients with thin corneas.

Regenera is also developing the Visagen family of drugs for the treatment of a variety of ocular diseases.

New IOP-Lowering Implant Being Studied
SOLX Says Device Could Eliminate Trabeculectomies.

Boston-based SOLX, Inc. said it has received Investigational Device Exemption (IDE) approval from the FDA to begin studies of its DeepLight Gold Micro-Shunt (GMS) implant for glaucoma. A randomized, multicenter study will evaluate safety and efficacy of the GMS for lowering IOP in primary open-angle glaucoma.

"This is the first 24-karat gold implant that uses the eye's natural pressure differential to reduce IOP without a bleb," said Gabriel Simon, M.D., Ph.D., director of Ophthalmic Research at the Boston University Photonics Center. "The need for less invasive, yet highly effective glaucoma treatments prompted our development of the micro-shunt – a tiny, biocompatible implant that uses the eye's natural pressure differential between the anterior chamber and suprachoroidal space to reduce IOP. The GMS has the potential to replace all tube-based shunts and eliminate trabeculectomy procedures."

GMS clinical results submitted to the European Agency for the Evaluation of Medicinal Products (EMEA) included 70 eyes with open-angle glaucoma that failed on maximum medical therapy as well as least one surgical intervention.

During a minimally invasive procedure, the ultra-thin GMS was inserted through a 4 mm-wide incision connecting the anterior chamber and the suprachoroidal space. Eyes in the study were followed for up to 2 years and have demonstrated more than 34% reduction compared to best medicated baseline, says SOLX. Complications and adverse events with the GMS were low and transient in almost all cases, especially compared to the adverse events associated with blebs.

The randomized study will take place at up to 10 centers worldwide on open-angle glaucoma patients who have failed maximum medical therapy and at least one surgical intervention.

The DeepLight Glaucoma Treatment System includes the DeepLight Titanium Sapphire Laser and the GMS, which can be used separately or together to provide patients with multiple options for IOP reduction. The laser has been approved in Europe and SOLX says it has been shown to provide deeper tissue penetration than other lasers currently used in trabeculoplasty, to a depth of approximately 200 microns, without causing thermal damage to the trabecular meshwork.

The GMS, which was recently approved for use in Europe, is a 24-karat gold ultra-thin implant that is approximately one-third the thickness of a human hair. This device is not a tube, but a flat plate designed for implantation through a single microincision. It contains numerous microtubular channels that bridge the anterior chamber and suprachoroidal space, maximizing uveoscleral outflow to reduce IOP. The GMS rests permanently in the suprachoroidal space and cannot be felt by the patient. It is biocompatible, physically inert and SOLX says it has been shown to eliminate the formation of scar tissue.

WORTH NOTING

Alcon earns honors. Alcon, Inc. is the recipient of two Frost & Sullivan Awards for the year 2005. The company has received both the Product of the Year Award in the ophthalmic medical devices market as well as the Company of the Year Award for the U.S. ocular hypertension and open angle glaucoma market. Frost & Sullivan is a global consulting firm that helps clients develop growth strategies.

Each year, Frost & Sullivan presents the Product of the Year Award to the company that has demonstrated excellence in new products within its industry. The Award recognizes innovation that has resulted in the launch of a broad line of emerging products and technologies. Alcon, Inc. is being recognized with this award for its AcrySof ReSTOR IOL that provides a high level of freedom from glasses following cataract surgery or through refractive lens exchange.

The second award Alcon received recognizes its operational excellence. The Company of the Year Award lauds a company's business development, competitive strategy and leadership. It recognizes outstanding management, consistent growth, exceptional customer service, and positive social and economic impact on local and national communities and customers.

Low-vision initiative. Oculi Vision Rehabilitation, LLC, (OVR) has been formed to help eyecare professionals add vision rehabilitation services to their existing practices. It is the joint venture of James Nedrow, PC in Lincoln, Neb., and Vision Advantage International, Inc. (VAI), headquartered in Palm Desert, Calif. OVR offers a total program of services and products to successfully facilitate market entry - facilities planning, staff recruitment, education and training, reimbursement consultation, marketing and ongoing consultation.