Imagen's Ophthalmology In-Licensing Strategy Attracts $40M Series A

With a plan to take advantage of scientific advances suggesting that compounds for cancer and other diseases may have facility in the eye, Imagen will seek ideal candidates for dry AMD.

With time to exit an increasingly important metric for venture investors as they woo limited partners interested in nearer-term returns, jump-starting new companies via in-licensing remains an important and popular strategy. That's especially true in ophthalmology, where evidence suggests medicines developed to treat cancer or inflammation may have additional utility in the eye.

, The latest ophthalmic play, New York-based Imagen Biotech Inc., led by Matthew Feinsod, a practicing ophthalmologist who also has worked at FDA, said on Oct. 19 it had raised up to $40 million in a Series A from Novo Ventures, SV Life Sciences and Fidelity Biosciences.

The in-licensing strategy pursued by Imagen is one of the defining principles behind such venture capital-backed start-ups as Lux Biosciences Inc., Ophthotech Corp., and PanOptica Inc. (Also see "Post-Macugen, Still In-Licensing to Uncover Value in Ophthalmology" - Scrip, 1 Jul, 2006.).

Imagen differs from Ophthotech and PanOptica in the particular eye diseases of focus, but otherwise there are striking similarities. To begin with, the three start-ups share common venture backers - SV Life Sciences has staked all three companies, while Novo Ventures is an investor in both Imagen and Ophthotech.

In addition, executives running the three companies all got their initial biotech management experience at Macugen (pegaptanib) developer Eyetech Inc., and as a result, have a long relationship with David Guyer, MD, who co-founded the biotech before eventually joining SV Life Sciences as a partner.

"It's the six degrees of David Guyer," Feinsod jokes.

Strategy To Advance Three Programs To Phase II

The money will be used to in-license and advance three different clinical assets to Phase II, after which the goal will be to look for partners. "What's nice about the model is we have enough financing to fund three projects through Phase II," says Feinsod. "We won't have the added distraction of fundraising" while simultaneously advancing programs in the clinic.

Feinsod hasn't definitively said what the assets will be - in fact he's still actively evaluating molecules worthy of building a company around. But the goal is to obtain compounds for sight-threatening diseases for which treatments currently are limited, including rare diseases like Stargardt disease and Leber's hereditary optic neuropathy.

The area of initial focus, however, will be dry age-related macular degeneration (AMD), one of the leading causes of irreversible blindness that heretofore has been difficult to study because the pathology takes years to develop and the underlying etiology of the disease is poorly understood.

Believed to result when specific cells in the macula called retinal pigment epithelial cells break down or thin, dry AMD is characterized by the formation of fatty deposits called drusen. Patients with dry AMD typically suffer from a slow but irreversible loss of sight; still, it's not unheard of for dry AMD to progress to the wet form, which occurs when abnormal blood vessels proliferate under and/or within the retina, leaking fluid and blood that irreparably destroys vision.

The advent of anti-VEGF therapies such as Lucentis (ranibizumab) and Avastin (bevacizumab) has resulted in what Anthony Adamis, Roche/Genentech Inc.' s VP and global head of ophthalmology, calls a "quantum leap" in the treatment of wet AMD. Even so, there's no single therapeutic counterpart to treat the dry version, which accounts for 90% of all diagnosed AMD cases. Thus, even if the factors causing dry AMD's progression remain mysterious, the large market - some 16 million Americans and Europeans are estimated to suffer from the condition -as well as the fact that no marketed therapy currently exists to treat the disease, means potentially large rewards to the companies that develop efficacious therapies.

"It's the largest ophthalmology market of all," notes Guyer, who estimates that a successful dry AMD drug could rival the sales figures of traditional primary blockbusters like the statins. The science has advanced enough in the past five years that it's now possible to make educated bets about the likely mechanisms of action that will prove to be important.

"A company with multiple assets can diversify and the large market justifies the potential risk," Guyer says.

Guyer and Feinsod aren't explicitly saying much about the potential mechanisms of action of greatest interest. As Feinsod puts it, "we're open-minded and will let the science drive the decision." In other words, the company will pursue molecules that, as of fall 2011, have the greatest likelihood of success based on the published data.

To date that means Imagen is likely pursuing candidate molecules that work by one of four mechanisms: neuroprotection, visual cycle modulation, immune system manipulation or anti-inflammation. There's plenty of competition in each arena; Acucela Inc., for instance, has a Phase II visual cell cycle modulator designed to slow the formation of toxic retinal by-products implicated in AMD, while MacuCLEAR Inc. plans to start Phase III trials of its repurposed anti-hypertensive before the end of 2011.

Complement Cascade May Be Key To Dry AMD

But the rivalry to be first to market in dry AMD is greatest in the anti-inflammatory space, where a growing body of genetic evidence links the disease to the mis-regulation of the so-called complement cascade, an "early warning" immune system pathway that triggers inflammation after infection or tissue damage.

Indeed, as studies published in journals like Science have identified potential bad actors in the complement pathway, there's been an all-out race to lock down intellectual property, with big players like Genentech and smaller parties such as Potentia Pharmaceuticals Inc. and Taligen Therapeutics Inc. entering the fray (Also see "Biotechs Eye Macular Degeneration" - Scrip, 1 Jul, 2009.).

Such fierce competition could make it tough for Feinsod to find affordable assets impacting the complement space. Indeed, in October 2009, Novartis AG division Alcon Inc. licensed rights to Potentia's Phase II ready C3 complement inhibitor in a deal that included both an undisclosed upfront and an option-to-buy tied to developmental milestones ([See Deal]). In January 2011, Alexion Pharmaceuticals Inc. spent $111 million up front to acquire Taligen, lured partly by the company's work on a Factor H inhibitor ([See Deal]).

Still, Feinsod and Guyer are confident good assets can be had at the right price. With big pharmas trying to pare R&D costs, notes Guyer, "there are more opportunities for in-licensing," especially in a domain like ophthalmology that requires such specialized expertise.

Feinsod agrees, adding that such expertise is one of the major selling points to Imagen's strategy. Indeed, he predicts "potential licensers will still recognize that an experienced and focused team with funding in place is uniquely positioned to bring new drugs to patients."

And it's likely Imagen's openness to different mechanisms of action will be an added benefit. Feinsod admits that molecules with certain features would be preferable; compounds that have already been in the clinic and have strong safety and toxicology profiles would be preferable to earlier stage molecules, which will require more upfront work on Imagen's part to make them IND-ready.

But as long as the science is sound, he says Imagen is definitely interested. The goal is to be very selective, but to in-license candidate compounds as quickly as possible.

(This story is adapted from "The New Ophthalmic Drug Players," an article running in the October 2011 issue of our sister publication, START-UP. The entire feature provides an overview of the funding environment for ophthalmology start-ups and includes profiles of four biotechs in the sector, including Imagen Biotech.)

-Ellen Foster Licking ([email protected])