Why This 11-Employee Massachusetts Biotech's Market Cap Doubled Yesterday

Why This 11-Employee Massachusetts Biotech's Market Cap Doubled Yesterday February 22, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Eyegate Pharmaceuticals , based in Waltham, Mass., announced yesterday that it had inked an exclusive, global licensing deal with Laval, Quebec-based Valeant Pharmaceuticals International . The deal caused the stock to explode, doubling its market cap.

The deal has EyeGate granting a subsidiary of Valeant—Bausch + Lomb—exclusive, global commercial and manufacturing rights to the EyeGate II Delivery System and EGP-437 combination product candidate to treat post-operative pain and inflammation in ocular surgery patients. This deal follows a deal in 2015 where Valeant picked up a global license for the same product for uveitis.

“We are pleased to extend our relationship with EyeGate, and to obtain the global commercial and manufacturing rights to the EyeGate II Delivery System for the indication of post-operative inflammation and pain in ocular surgery patients,” Joseph Papa, Valeant’s chairman and chief executive officer, said in a statement. “We believe that the product has significant potential in the market as part of our Bausch + Lomb business and applaud EyeGate for a remarkable job in advancing the product’s development in both uveitis and cataract surgery. We look forward to further supporting EyeGate as they continue their progress in bringing this product to market to meet the needs of our customers and their patients.”

EyeGate will continue to develop the EyeGate II delivery system in the U.S. for post-operative pain and inflammation in eye surgery patients, and be responsible for all costs. Valeant now has the rights to develop it outside of the U.S., as well as its costs.

EyeGate received $4 million upfront. It is eligible for up to $99 million in milestone payments.

EyeGate has 11 employees. The company raised $10 million in its initial public offering (IPO) in July 2015.

The EyeGate II Delivery System utilizes a low-level electrical current to deliver drugs directly into the eye. It is marketed as an alternative to drops and injections.

“This second licensing agreement with Valeant provides an important validation of both the clinical and commercial potential of iontophoretic EGP-437,” said Stephen From, president and chief executive officer of EyeGate in a statement. “We believe that Bausch + Lomb’s sales, marketing and commercial capabilities in ophthalmology are unrivalled, making them the optimal partner to bring this unique product to market. For the approximately 3 million cataract surgery patients in the U.S. each year, adherence to the post-operative therapeutic regimen is imperative. As many of these patients are older and may struggle with self-administration of corticosteroid eye drops, we believe that iontophoretic EGP-437 administered by the eye care practitioner will provide a promising new treatment in addressing the needs of this large patient population.”

EGP-437 incorporates a reformulated topically active corticosteroid, Dexamethasone Phosphate, then is delivered into the eye using the EyeGate II Delivery System. The company is also developing, through its wholly-owned subsidiary, Jade, products that use cross-linked thiolated carboxymethyl hyaluronic acid. The company states, “The ability of CMHA-S to adhere longer to the ocular surface, resist degradation and protect the ocular surface makes it well-suited for treating various ocular surface injuries.”

EyeGate is currently trading for $3.22. Shares traded for $1.64 on Friday, February 17.

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