UPDATE 2-Ophthotech may get over $1 bln from eye drug deal with Novartis
(Adds details, analyst comments)
May 19 (Reuters) - Ophthotech Corp said it could potentially receive over $1 billion in payments as part of a licensing deal for its experimental eye drug with Novartis AG .
Ophthotech's shares rose as much as 29 percent in trading after the bell.
The company said on Monday that a unit of Novartis will market its lead experimental eye drug, Fovista, outside the United States.
Ophthotech said it could receive immediate and near-term milestone payments of up to $330 million and is eligible to get ex-US marketing approval and sales milestone payments of up to $700 million.
The payments do not include future royalties from sales of the drug outside the United States, the company said.
"The deal validates Fovista, while importantly allowing the company to retain and fund the drug's development and US commercialization," J.P. Morgan analyst Geoff Meacham said in a note.
Ophthotech is testing Fovista in late-stage studies to treat wet age-related macular degeneration (AMD), in combination with standard treatments including Regeneron Pharmaceuticals Inc's Eylea and Roche Holding AG's Avastin and Lucentis.
Ophthotech said it expects initial data from Fovista's development program in 2016.
Wet AMD is caused by abnormal blood vessels leaking blood or fluid into the retina and is the more advanced form of AMD, the most common cause of blindness in the elderly.
Fovista is designed to strip cells that wrap around newly-formed blood vessels in the eye, allowing the standard treatments to inhibit the growth of new blood vessels.
Ophthotech said Novartis would develop and market the technology such as a pre-filled syringe to deliver the injectable eye drug.
The company also said Fovista could be used in a fixed combination with an experimental treatment of Novartis.
Ophthotech said it will file for approval of the drug in the United States, and will collaborate with Novartis to seek approval outside the country.
The company's shares, priced at $22 in its IPO in September, closed at $31.46 on the Nasdaq on Monday.
(Reporting By Vrinda Manocha in Bangalore; Editing by Sriraj Kalluvila)