Regeneron Falls After Rival Eye Drug Combo Works in Trial

Regeneron Pharmaceuticals Inc. (REGN), maker of a drug for a leading cause of blindness, sank the most in a year after another therapy was shown to improve vision when used with a rival medicine from Roche Holding AG. (ROG)

Regeneron declined 12 percent to $111.88 at the close in New York, the biggest decline since April 2011. Ophthotech Corp., a closely held biotechnology company, today released data showing that its drug Fovista taken with Roche’s Lucentis improved vision more than Lucentis alone. Regeneron’s Eylea works in a similar way to Lucentis.

The data may push Roche, based in Basel, Switzerland, and Regeneron into a bidding war for Princeton, New Jersey-based Ophthotech as they seek dominance in the disease, two analysts said.

The trial “throws the current competitive landscape for wet AMD into some turmoil,” Steve Yoo, an analyst with Leerink Swann in New York, said in a note to clients. “Ophthotech has a valuable asset that, in our view, can play the role of the king- maker in the wet AMD market.”

The 24-week trial of 449 patients showed that Fovista plus Lucentis increased vision 62 percent more than Lucentis alone in patients with wet age-related macular degeneration, or AMD, a leading cause of vision loss in the elderly.

Ophthotech Comment

Samir Patel, Ophthotech’s chief executive officer, declined to say whether he’d been in talks with larger companies about an acquisition.

“We’re going to look at all those possibilities and formulate a plan that will bring the drug in the most efficient way to the marketplace,” Patel said in a telephone interview.

Phil Nadeau, an analyst with Cowen & Co. in New York, also said he sees Ophthotech as a takeover candidate.

“Roche or Novartis would have much to gain by buying Ophthotech, co-formulating Lucentis and Fovista and recapturing share from Avastin and Eylea,” Nadeau said in a note to clients. “We would assume Regeneron also understands the value of combining Fovista and Eylea.”

Lucentis generated 1.5 billion Swiss francs ($1.6 billion) in sales last year for Roche. Tarrytown, New York-based Regeneron, whose stock has more than doubled since Eylea was approved in November, expects its medicine to draw as much as $550 million in 2012 revenue.

“The data suggest that the treatment of wet AMD is likely to continue to evolve, and this is a negative for Regeneron as the company’s current valuation assumes consistently high sales of Eylea for a number of years,” Nadeau said.

Peter Dworkin, a spokesman for Regeneron, declined to comment on the study and the analysts’ notes.

“The early trial outcome is interesting but we can’t comment further at this time, as we’ve not seen the full results,” Terence Hurley, a spokesman for Roche, said in an e- mail.

To contact the reporters on this story: Drew Armstrong in New York at darmstrong17@bloomberg.net; Meg Tirrell in New York at mtirrell@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net