Valeant to commercialize and manufacture EyeGate's eye drug delivery device

EyeGate II Delivery System--Courtesy of EyeGate

Valeant Pharmaceuticals ($VRX) will commercialize and manufacture a delivery system and reformulated, topically active corticosteroid to treat uveitis developed by EyeGate Pharmaceuticals.

In return, the Big Pharma player will give EyeGate an upfront cash payment and development-based milestone payments, including one for FDA approval of the combination product (dubbed EGP-437). Following approval, EyeGate will be eligible for additional sales-based milestone payments, as well royalties based on net sales, according to a release.

The specialty pharmaceutical company needed financing for its second Phase III for the uveitis treatment after its IPO on the Nasdaq underperformed. Instead of raising the hoped-for $30 million, EyeGate had to halve its share price, and in February sold fewer than 700,000 shares for $6 on the over-the-counter market, reports Xconomy.

EyeGate's stock has risen by more than 20% since Friday morning's announcement, and now trades at $6.70.

The company touts its delivery system for dexamethasone phosphate as an alternative to complicated intraocular injections and eye drops, which suffer from noncompliance. EyeGate says the device can administer the medication into both eyes in about 15 minutes. The EyeGate II Delivery System uses iontophoresis (a low-level electrical current) to deliver specified quantities of drug into the eye.

It consists of an applicator for drug delivery into the eye, components for transferring the drug from its vial into the applicator, an electrode to complete the electric circuit and a generator to provide current.

"This licensing agreement provides a significant validation for the EGP-437 combination product and has transformative potential for EyeGate. Valeant is among the largest and most respected companies in the ophthalmology space, and we are thrilled to be working with them to advance our lead product candidate," said EyeGate CEO Stephen From in a statement. "We believe that the iontophoretic delivery of EGP-437 via the EyeGate II Delivery System represents a compelling new approach to the treatment of uveitis that could improve patient outcomes through increased adherence."

EyeGate will bear all expenses associated with development of EGP-437 in the U.S., with treatment of anterior uveitis as the indication. Valeant will fund all costs related to development of EGP-437 outside the U.S.

Valeant also has the right of last negotiation to license it for other indications. EyeGate aims to start a Phase Ib/IIa trial of the combination product to treat macular edema in August, according to ClinicalTrials.Gov.

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