Wednesday, December 9, 2015

Ophthotech (OPHT) has caused 2 Giants to Curtsy, Fovista is the next Franchise Maker~

On May 19, 2014, OPHT entered into the largest deal in the history of biotech with Novartis. The total deal is worth $1B with upfront payments, $330M already realized, in addition to milestones ahead. 

The most impressive nugget is not the $1B Headline number but the potential for Billions in yearly Sales and Income if the Phase III results/data proves:

  • Fovista has the power to Reverse some blood vessel damage wet AMD (Age-related Macular Degeneration) is responsible for, thus great hope for Preventing or Delaying patients from going blind. Imagine being on the brink of blindness but being able to avoid the horror because of the novel properties of Fovista. 
From OPHT's 10-K, dated March 14, 2014, click here for entire page
We further believe that the administration of Fovista in combination with anti-VEGF drugs in patients with wet AMD may cause regression of neovascularization and may inhibit subretinal fibrosis more effectively than anti-VEGF monotherapy. We believe that Fovista may provide meaningful added benefit in the treatment of wet AMD regardless of which anti-VEGF drug is administered in combination with Fovista.

CEO David Guyer's confidence in the life changing potential of Fovista is clear during every presentation. Click here to analyze Guyer's most recent live appearance:
Oppenheimer conference on Tuesday, December 8, 8:35am ET.

REGN has not joined forces with the 2 Giants, Novartis and Genentech but this could change or else REGN risks that OPHT chooses Genentech's Lucentis and the fallout on Sales of Eylea could have disastrous consequences. We'll be paying close attention to every Investor Day and earnings call REGN is involved in from this day forward.  

After sending a bullish take on REGN in the $45.00 range in 2011, before Eylea was approved, we feel that OPHT is in a similar situation but isn't getting enough respect perhaps because Fovista's Phase III top-line data won't be released until Q4, 2016. 

We're assigning a 67% probability that this drug is truly Special and will graduate to blockbuster $1B Sales status within 1-year. Guyer has become more aggressive of late trying to explain why and how Fovista is on the doorstep of changing lives of patients and shareholders. Please play back the Oppenheimer conference with link provided above and you'll make a sounder Investment or Trade thesis. Our most profitable trades were the direct result of spending Time & Effort researching, but especially listening to the Psychology of the Call(s). 

Eyelea and Lucentis will have combined Sales of about $5B in 2016. Fovista just has to show the same Phase II 62% improvement in reading acuity in Phase III and we estimate that $500M in U.S. Sales will be easy within 5-Quarters post approval. And with the likes of Novartis and Genentech ex-U.S. Sales should ramp quickly right out of the gate.   

But if Fovista proves that it's capable of turning back the clock on a certain percentage of damaged blood vessels and stop subretinal fibrosis more effectively than the mono therapies Eylea and Lucentis then OPHT will have a tremendous opportunity to Sprout a Ophthamology Franchise from a single molecule. 

Guyer would be vindicated and would be able to highlight the ineffectiveness of Wall Street analysts like Terence Flynn with Goldman Sachs who issued a Sell rating and $45.00 price target on August 7, 2015.

We remain suspicious of Terence Flynn's motivations behind his Sell rating, here's a link that explains.

If at the end of 2016 we witness that paradigm shift data then OPHT should fast become the only biotech that is marketing a wet AMD drug with ability to Prevent people from going blind. 

OPHT's current $2.4B market cap would Gap to new highs which few Investors are positioned for even with a small percentage of their aggressive portfolios.

REGN's market cap is 60X larger than OPHT's as of today. Though attaining REGN's size is unlikely no matter what the top-line data shows in 2016, we dearly wanted our loyal readers to understand that there is a Special nugget to look for when that day of reckoning finally comes.

We believe OPHT could carry a $4B market cap in 2016 ahead of what will be super exciting and very positive Phase III results.

1-year chart has been very bullish in 9 out of the last 12-months

Happy Christmas and Happy Hanukkah to One & All !

The IPO was impressive when you review; some extra credit information. If you had to guess after reading the piece above, was Goldman part of the syndicate team with OPHT? Answer will be found below.

The New York-based ophthalmics company, founded by former Eyetech Pharmaceuticals executives David Guyer and Samir Patel, priced its IPO late Tuesday, and sold 7.6 million shares at $22 apiece. Those figures mean Ophthotech ended up raising a whopping $167.2 million from the offering—a number that could jump even higher if its underwriters add the 1.14 million additional shares they have the option to buy at the IPO price over the next 30 days.
Ophthotech’s haul is more than double the $85 million the company initially sought to raise from public investors when it first outlined its IPO in August. Further, Ophthotech upsized the offering and boosted its projected range twice. On Sept. 9, it contemplated selling 5.72 million shares at $16 to $19 apiece. Then, early Tuesday, it amended its IPO prospectus again, estimating that it would sell 7.6 million shares at $19 to $20 apiece. It’ll begin trading on Wednesday on the Nasdaq under the symbol “OPHT” with a market capitalization already exceeding $600 million.
Novo A/S (28.65 percent) was Ophthotech’s largest stockholder prior to the IPO, followed by SV Life Sciences (26.80 percent), HBM Healthcare Investments (15.21 percent), and Clarus Ventures (13.57 percent).
Morgan Stanley, J.P. Morgan Securities, Leerink Swann, and Stifel, Nicolaus & Co. are the company’s underwriters.
Why all the interest? Investors are clearly intrigued by Ophthotech’s approach to treating the wet form of age related macular degeneration, a condition in which abnormal blood vessels grow in the macula—a part of the retina—and leak behind the eye, leading to distorted vision and potential blindness.
The market for wet AMD has evolved from laser therapies to a group of drugs injected into the eye that work by blocking the vascular endothelial growth factor (VEGF) that researchers believe causes the condition to worsen. Roche/Genentech’s cancer drug bevacizumab (Avastin) is often prescribed off-label for wet AMD, but the other anti-VEGFs—ranibizumab (Lucentis, also from Roche/Genentech) and aflibercept (Eylea, from Regeneron) have also emerged as big successes.
Ophthotech is trying to tweak the wet AMD treatment paradigm. While anti-VEGFs only stop abnormal blood vessels from continuing to grow, Ophthotech has created a drug that targets a different protein, platelet-derived growth factor (PDGF), which scientists believe may cause those blood vessels to recede when added to the regimen. Ophthotech’s plan, then, is to have patients get separate injections of both its anti-PDGF (a drug it hopes to market as Fovista if approved by regulators), and an anti-VEGF, during each visit. Though Ophthotech isn’t the only company trying this type of approach—Waltham, MA-based startup Kala Pharmaceuticals is developing an anti-VEGF/anti-PDGF combination as well, for instance—the Ophthotech drug is the furthest along in development.
Ophthotech’s big IPO raise will help bankroll a late-stage clinical trial, in which it’s hoping to show that patients getting injections of both its anti-PDGF and ranibizumab fare better than those getting injections of the Roche drug alone. Ophthotech will start that big Phase 3 by the end of the year, and plans to have the first top-line data from that study in 2016. Ophthotech owns worldwide rights to the drug.


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