Author: Pooya Hemami
Age-related macular degeneration (AMD) is the leading cause of blindness in older adults in western countries. Even though neovascular AMD (NVAMD, or wet-AMD) can be controlled in most cases with recurring anti-vascular endothelial growth factor A (VEGF-A) intravitreal injections (IVT), there is a substantial unmet need for those with the dry form of the disease (whose prevalence is over five times higher), particularly those who develop geographic atrophy (GA). There is also a need to improve NVAMD treatments, as recurring IVT injections are burdensome, and about a third of patients will become refractory to anti-VEGF-A over time. This report provides an overview of most of the leading candidates and technologies that will shape the AMD market in the coming decade. Not all of these products will be successful, but those that are could potentially generate outsized returns for investors.
A huge market opportunity
The NVAMD market size is already substantial, at over $5.25bn worldwide revenue, and growing in double-digits, as ranibizumab and aflibercept (the current leading treatments) had 13–14% revenue growth in the past year. NVAMD reflects roughly only half of late-stage AMD patients. Late-stage AMD (defined as those patients with GA or NVAMD) affects roughly five million people across the US and Europe, and most of these patients will become legally blind without treatment. Another approximately fifteen to 20 million people in these regions have early-to-intermediate forms of dry-AMD and could be at risk of developing late-AMD, but there is no widely accepted and approved treatment for this stage of the condition. Altogether, approved and effective GA or dry-AMD treatments could add billions of dollars to an already huge AMD market.
- Treatments that gain regulatory approval and can be shown to either require less frequent, invasive dosing than current approved IVT drugs or provide stronger or more sustained improvements in vision compared to or added to current NVAMD standard-of-care.
- NVAMD treatments that can be self-administered by patients or administered non-invasively.
- Products that can be shown to stabilize vision in dry-AMD or GA patients.
- Patients who will benefit from potentially more effective treatments, and/or may require less frequent invasive dosing.
- Companies currently marketing anti-VEGF IVT drugs in NVAMD, but which lack follow-on candidates in their pipeline to compete with emerging new competition.
Winners and losers: Companies shown above do not translate into buys or sells as other themes (and valuation parameters) may conflict with this one.
|Companies||Market cap ($m)||Price ($)|
|Ellex Medical Lasers||58||0.4|
|Scifluor Life Sciences||–||–|
Source: Source: Refinitiv at 15 July 2019
Opportunities abound in the NVAMD space
Firms are looking at ways to extend NVAMD treatment durability to reduce the frequency of IVT instillations. Roche and Novartis are working on late-stage follow-on mAB drugs that are more efficient or effective in targeting the angiogenesis factors in NVAMD. Novartis recently filed a biologics license application (BLA) for brolucizumab and Roche started Phase III studies on faricimab. We also review alternate mechanisms including gene therapies that can provide extended treatment durations of potentially up to a year, as well as candidates targeting non-VEGF-A mechanisms to provide options for those refractory to current treatments. Topical (non-invasive) treatments are an exciting prospect as well.
Dry-AMD represents an untapped frontier
Firms are developing treatments targeting inflammation and/or oxidative stress, and there is finally some promising Phase II data for Apellis’s APL-2 and Allegro’s risuteganib, in particular, which along with other candidates hold real potential for this huge untapped market. Recent trials show that proprietary light-based therapy (Ellex’s 2RT and LumiThera’s Valeda) may potentially decelerate progression of early-to-intermediate stage Dry-AMD patients. Altogether, we expect the next five to 10 years to be potentially revolutionary in a segment that until now has had little to offer to patients beyond dietary supplements and lifestyle modifications.
Age-related macular degeneration: Wide opportunities
Age-related macular degeneration (AMD) is the leading cause of blindness in adults over the age of 55 in western countries, and is characterised by damage to the macular region of the retina, leading to central vision loss. Prevalence increases with age, as about 2% of the population have the condition at age 40, rising to c 25% by age 80. AMD patients generally maintain their peripheral vision but the damage to central vision can be so severe in advanced cases as to restrict a patient’s ability to work, read, recognise faces or independently perform other habitual tasks.
While the exact pathophysiology is not fully understood, AMD is believed to be caused by oxidative stress, mitochondrial dysfunction, inflammatory processes and/or cardiovascular (lipid-cholesterol pathway) factors. Genetic and environmental factors (such as smoking history or prolonged exposure to ultraviolet light) may also play a role in pathogenesis. There are two forms of AMD: dry (non-exudative) and wet (exudative).
The wet form (also called NVAMD) is characterised by exudative and neovascular changes, such as the formation of choroidal neovascularisation (CNV). CNV refers to newly immature blood vessels from the eye’s choroid layer growing into the overlying retina, which often leaks fluid, compromising the function of photoreceptors and connecting neurons, leading to central vision loss. The loss can be reversible if the excess fluid is eliminated in a timely manner, such as through the use of injection treatments to suppress vascular endothelial growth factor (VEGF), the current standard of care (SoC). However, without timely treatment, the excess fluid can lead to macular scarring/fibrosis, damaging photoreceptors and resulting in more permanent central vision loss. Further, for many treated NVAMD patients, the factors leading to CNV formation are ongoing and chronic, and persistent and recurrent fluid accumulation can still lead to fibrosis and permanent vision loss if anti-VEGF therapy is not adequately maintained (thus patients require ongoing and repeated IVT injections to control the condition).
The wet form of AMD is always preceded by the dry form, and it accounts for about 10–20% of AMD cases. Prior to the usage of anti-VEGF (vascular endothelial factor) injection treatments, the current standard of care for NVAMD, it accounted for over 80% of AMD patients with legal blindness.
Early-stage AMD is mostly asymptomatic and characterised by drusen (deposits below the retinal pigment epithelium, or RPE, level), reticular pseudodrusen (RPD, deposits above the RPE), and pigmentary changes. Late-stage AMD is often defined as patients who develop NVAMD and/or GA. In general, RPE dysfunction and atrophy precedes the late stages of AMD (GA or CNV).
Globally, the prevalence of AMD (all stages) in adults above age 45 is estimated at 8.0%, affecting about 13 million people across western Europe, and the US prevalence of all-stage AMD was approximately 7.2 million in 2008. However, under the currently accepted treatment patterns, the primary target market for medical therapy are those with late stages of the disease (NVAMD or GA), as most earlier-stage patients are asymptomatic and may never evolve to vision-threatening, later disease stages. It is effectively the late-AMD population that is the primary target market for medical therapies, most particularly the NVAMD market (whereby prompt medical treatment is generally needed upon CNV diagnosis, as permanent scarring and severe vision loss often result if untreated).
Individuals with Caucasian or European ancestry are believed to be more prone to developing AMD. The prevalence of Caucasians in the United States with NVAMD, GA, and Late-stage AMD has been estimated at 1.1 million, 1.0 million and 2.0 million, respectively. Based on US National Institutes of Health (NIH) data that estimates that Caucasians account for 89% of all US AMD cases, we estimate that the US prevalence of NVAMD, GA and Late-stage AMD would be approximately 1.2 million, 1.1 million and 2.2 million, respectively.
In Europe, it has been estimated that the number of people with Late-stage AMD was 2.7 million in 2013, and that it will rise to 3.9 million by 2040 (a 1.4% CAGR).
NVAMD treatments exist, but room for improvement
The current standard-of-care (SoC) for NVAMD is to reduce angiogenesis (blood vessel proliferation) by blocking vascular endothelial growth factor A (VEGF-A) binding and activity. VEGF A is a biochemical signal protein that promotes angiogenesis throughout the body and in the eye, and tends to be over-expressed in hypoxic environments. Currently, the only effective reliable mechanism to block VEGF-A in the retina is through intravitreal injection (IVT) of monoclonal antibodies (mABs) targeting this protein.
The first FDA-approved therapy of CNV/NVAMD was pegaptanib sodium (Macugen, sold by Bausch (BHC, TSX) and Pfizer (PFE, NYSE)) in 2004, but its uptake was relatively limited compared to off-label bevacizumab (Avastin, Novartis (NOVN, SIX)) and then ranibizumab (Lucentis, marketed by Roche (ROG, SIX) in the US and Novartis in ex-US markets; approved in 2006) and most recently, aflibercept (Eylea, marketed by Regeneron (REGN, Nasdaq) and Bayer (BAYN, Xetra); approved in 2011). Both ranibizumab and aflibercept work by inhibiting VEGF-A thus blocking angiogenesis (the growth of new blood vessels). Aflibercept is a soluble decoy receptor that in addition to binding VEGF-A also inhibits placental growth factor (PLGF), which itself is another growth factor involved in promoting angiogenesis. All of these products currently must be delivered through IVT.
Today, anti-VEGF-A therapy for CNV (typically, ranibizumab or aflibercept) dramatically improves or stabilises vision in the large majority of NVAMD patients. For instance, when ranibizumab was approved by the FDA, the two pivotal Phase III (MARINA and ANCHOR) trials showed that 95% of treated NVAMD patients maintained their baseline VA at 12 months, and up to 40% improved (defined as a gain of 15 letters or more vs baseline) their vision at one year. At two years, patients in the MARINA pivotal study experienced an average improvement of 6.6 letters vs baseline, compared to a loss of 14.9 letters in the sham (control) arm. Up to 40% of ranibizumab-treated patients achieved VA of 20/40 (50%) or better.
The success of VEGF-A blockers in NVAMD also resulted in their use and approvals in other retinal conditions involving unwanted angiogenesis or vascular leakage in a hypoxic environment, such as diabetic retinopathy (DR) related conditions such as diabetic macular edema (DME), retinal vein occlusions (RVO), etc. These conditions generally also involve a VEGF-A dependent pathogenesis pathway.
Chronic nature of therapy provides a recurring revenue stream
Under the current SoC, NVAMD patients require recurring (often every four to eight weeks) IVT injections of anti-VEGF-A treatments (typically ranibizumab or aflibercept) in NVAMD-affected eyes, primarily to prevent the recurrence of new areas of CNV. This has led to significant revenue generation for the leading drugs, as Eylea recorded 2018 global sales of $6.75bn (+14% y-o-y) and global Lucentis sales were $3.74bn (c +13% y-o-y). Wet-AMD and diabetic retinopathy (including DME) were the primary sources of revenue for both products and we estimate that NVAMD represents approximately 50% of the total anti-VEGF-A retinal drug market (with DR including DME accounting for most of the other half). Contributions also occur from other medical retina indications associated with angiogenesis and/or hypoxia (such as macular edema following RVO). Both Eylea and Lucentis are administered through injections (often administered every four to eight weeks) and each dose costs about $2,000 in the US.
While VEGF-A IVT therapy is often effective, it has several drawbacks for the patient; it requires patients (who are senior citizens and may have other comorbidities or mobility restrictions) to have a regular visit to their eye care practitioner (ECP) to receive IVT injections, which may not be comfortable or convenient for the patient. Any IVT injection carries a small but nonzero risk of endophthalmitis (intraocular inflammation), a potentially devastating condition that often leads to total blindness. A recent multicentre longitudinal study involving over 88,000 injections between January 2006 and November 2016 found that the cumulative risk of developing infectious endophthalmitis after 60 IVT injections was 0.84% and the cumulative risk of non-infectious endophthalmitis was approximately 0.23%. These factors provide incentives for firms to develop new therapies for NVAMD to improve convenience, efficacy and/or reduce the frequency of invasive procedures.
Further, it has been estimated that 20–37% , of NVAMD patients’ vision continues to worsen and they ultimately become legally blind (20/200 or worse VA) despite anti-VEGF therapy, further prompting the need to develop new treatment for patients refractory to current NVAMD SoC.
Below we classify different approaches under clinical investigation for ameliorating NVAMD in the market, which is already worth in excess of $5.25bn worldwide (excluding the use of VEGF-A drugs for non-NVAMD indications such as DR/DME).
Evolutionary pipeline of emerging anti-VEGF NVAMD therapies
The evolutionary (lower-risk and more conventional) approach, currently taken by big pharma participants such as Roche and Novartis, is to develop follow-on mAB drugs that are more efficient or effective in targeting the angiogenesis factors in NVAMD, which can reduce the frequency of IVT instillations for patients and improve compliance. The leading advanced (Phase III or later) stage drugs in this category are Roche’s faricimab and Novartis’s brolucizumab. Both drugs are being investigated in NVAMD and DME:
Novartis filed a biologics licence application (BLA) for brolucizumab in NVAMD, using a priority review voucher, and could potentially obtain approval before YE19. The regulatory application is largely based on Phase III data from the HAWK and HARRIER studies, which both met their primary endpoints of non-inferiority to aflibercept in mean change in best-corrected visual acuity (BCVA) from baseline to week 48. Novartis also stated that secondary endpoint assessments in both studies showed that significantly fewer brolucizumab-treated patients (vs aflibercept) had disease activity or (excessive) retinal fluid at week 48. The firm states that these are the first and only global head-to-head trials in patients with NVAMD that prospectively demonstrated 48-week efficacy starting with a 12-week dosing regimen. In contrast, aflibercept is typically dosed in NVAMD patients at every four weeks for three injections, and then at either every four weeks or every eight weeks (depending on patient response) thereafter for the first year.
Roche’s faricimab is a bispecific mAB that targets both VEGF-A and angiopoietin-2 (Ang-2); Ang-2 is also believed to play an important role in NVAMD (relating to inflammation and vascular permeability). Phase II STAIRWAY data (n=76) in NVAMD showed that at week 52, faricimab patients dosed either every 12 or 16 weeks demonstrated sustained vision outcomes comparable to ranibizumab dosed every four weeks. The Phase III pivotal NVAMD studies TENAYA and LUCERNE (both started in H119; n=640 for each) will compare faricimab (dosed every 16 weeks, with an option to increase frequency if needed) to aflibercept dosed every eight weeks.
Allergan (AGN, NYSE) and Molecular Partners (MOLN, SIX) are developing abicipar pegol, a DARPin (designed ankyrin repeat protein) designed to bind and inhibit VEGF-A. DARPins are small-protein therapeutic agents intended to bind targets with high potency and specificity. In Q318, results from two head-to-head Phase III trials against ranibizumab (SEQUOIA and CEDAR) were reported and showed that both the eight-week and 12-week treatment abicipar pegol regimens met the pre-specified primary endpoint of BCVA non-inferiority to ranibizumab (dosed at every four weeks). However, in both the SEQUOIA and CEDAR studies, the incidence of intraocular inflammation was c 15% in the abicipar pegol arms, compared to <1% in ranibizumab. In April 2019 the companies reported results from the MAPLE study evaluating the safety of abicipar produced via a modified manufacturing process, and showed a reduced (8.9%) incidence of intraocular inflammation. This level is still higher than that seen with competing approved anti-VEGF drugs, and may affect the product’s likelihood of obtaining approval (in addition to its competitiveness among anti-VEGF treatments), although Allergan expects to file a BLA with the FDA in or around mid-2019.
A related approach also undertaken by Roche is to develop an improved drug delivery system that can reduce the number of patient visits or need for IVT injections of an existing anti-VEGF-A drug, ranibizumab. It has developed a Port Delivery System (PDS), which is a small, refillable device (indicated as slightly longer than a grain of rice), designed to continuously deliver a specialised formulation of ranibizumab over time. The PDS is implanted into an eye in a c 30-minute surgical procedure.
Each of these four approaches involve using an established primary mechanism of action (blocking angiogenesis by targeting VEGF-A) and, in our view, carry relatively lower regulatory risk (thus a higher chance of obtaining approval) than some of the more experimental approaches described later in this report. Provided they obtain regulatory approval, they are expected to be follow-on products to (and eventually extract the bulk of market share from) current mAB treatments like IVT ranibizumab or aflibercept. In particular, in our view brolucizumab has a high likelihood of obtaining FDA approval and we estimate that faricimab also appears to have a strong likelihood of reaching the market if its Phase III results are in line with trends reported STAIRWAY trial. Roche’s PDS-ranibizumab could be a potential game-changer for patients who have mobility issues or restrictions or those located in rural areas (not within close driving distance to a treating ECP or ophthalmologist).
Exhibit 2: Later-stage injection or invasive anti-VEGF-A product candidates for NVAMD and/or DME
Source: Company reports
Next-generation NVAMD therapies
Below we provide more detail on some of the more novel treatment approaches being investigated for NVAMD. In our view, these may have not yet demonstrated as comprehensive indications of safety and efficacy as the previously listed product candidates (which are in Phase III or registration stages), but they have more novel mechanisms of action or approaches, that can fit into one of the following three criteria:
- unique treatment mechanistic pathway allowing for a potentially more effective treatment in NVAMD patients, particularly if used in combination with existing anti-VEGF-A therapy; this approach could potentially also be used on patients currently refractory or not optimally treated with anti-VEGF-A therapy alone
- novel pharmacological approaches enabling longer duration of action, resulting in less frequent IVT dosing, or
- employing potentially less invasive or even non-invasive drug delivery approaches, improving patient compliance and potentially enabling self-administration in some cases.
Below we review some of the leading pipeline developments in these categories.
Source: Edison Investment Research
Source: Edison Investment Research