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Regeneron Jumps on Positive Review for Eye Drug

From Associated Press (June 15, 2011)

WASHINGTON -- Shares of biotech drug maker Regeneron Pharmaceuticals Inc. jumped Wednesday morning after federal regulators said the company's experimental eye drug works as well as a blockbuster treatment already on the market.

The Food and Drug Administration said the company's drug, VEGF Trap-Eye, worked as well as Roche's Lucentis in preserving eyesight in seniors with a condition that damages the retina and can lead to blindness.

On Friday an outside panel of experts will vote on whether the drug should be approved. The FDA is not required to follow the group's advice, though it often does.

Analysts have high expectations for Regeneron's drug because it designed to be injected less frequently than Lucentis: once every two months, versus once a month.

"It's a big deal for patients and caregivers if you can get less frequent injections in the eye," said Dr. Michael Aberman, Regeneron's vice president of strategy and investor relations. "It's a great advancement in quality of life and compliance."

The FDA said studies of VEGF Trap-Eye showed it worked as well as Lucentis in maintaining patients' vision after one year of treatment.

Shares of Tarrytown, N.Y.-based Regeneron Pharmaceuticals Inc. rose $3.68, or 6.7 percent, to $58.71 in afternoon trading.

If approved, VEGF Trap-Eye will be the first drug to compete with Roche's Lucentis, which posts sales of about $1.5 billion annually. The FDA is scheduled to make its final decision on the drug by Aug. 20. If approved, Regeneron and its partner Bayer Pharmaceuticals will co-market the drug under the brand name Eylea.

Deutsche Bank analyst Robyn Karnauskas said the FDA review appears "very favorable" for Regeneron because it includes a proposed drug label.

"By including the label, we think the FDA is likely to approve Trap-Eye with a dosing regimen that would make it competitive to both Lucentis and Avastin."

Avastin is another Roche drug with a similar chemical makeup to Lucentis. Avastin is technically a cancer drug -- it is not approved for use in the eye -- but many eye doctors prescribe it because it is much cheaper than Lucentis.

Both drugs successfully treat wet age-related macular degeneration, which causes new blood vessels to grow in the eye and leak blood and fluid, damaging the retina and distorting vision.

The condition usually affects older adults.

The "dry" form of the condition is the most common type of macular degeneration, with the "wet" form considered the more advanced version of the disease. There are up to 200,000 new cases for the wet form of the condition each year in the U.S.

Wet macular degeneration is the leading cause of blindness for people over the age of 65 in the U.S. and Europe.

Posted: June 2011