pSivida announced the acquisition of Icon Bioscience, a specialty biopharmaceutical company, and has rebranded as EyePoint Pharmaceuticals. Icon's lead product is Dexycu (dexamethasone intraocular suspension) 9%, which is FDA approved for postoperative inflammation and is administered as a single dose at the end of ocular surgery. Dexycu is the first long-acting intraocular product approved by the FDA for the treatment of postoperative inflammation. Dexycu utilizes Icon’s proprietary Verisome drug-delivery platform which allows for a single injection that releases over time.
pSivida has entered into a financial agreement with EW Healthcare Partners. EW Healthcare Partners and a third party investor will make equity investments in pSivida for a total of up to approximately $60.5 million. In addition, SWK Holdings Corporation (SWK) has agreed to provide pSivida with up to $20 million in a debt facility. The company will use these resources to finance the Icon acquisition and prepare for the commercial launches of Dexycu and, if approved by FDA, Durasert micro-insert for the treatment of no-infectious uveitis affecting the posterior segment of the eye.
Two Potential Near-Term Launches
- On February 9, 2018, the FDA approved Icon Bioscience’s new drug application (NDA) for Dexycu, a dropless, long-acting therapeutic for the treatment of postoperative inflammation. There are over 4 million cataract surgeries performed annually in the U.S. pSivida plans to launch Dexycu in the U.S. in the first half of 2019 following the successful scale up of commercial supplies.
- On March 19, 2018, the FDA accepted pSivida’s NDA for Durasert micro-insert for treatment of non-infectious posterior segment uveitis, which will be subject to a standard review and has a Prescription Drug User Fee Act (PDUFA) action date of November 5, 2018. Posterior segment uveitis is a high unmet need area with limited treatment options and the third leading cause of blindness in the U.S. If approved, pSivida expects to launch Durasert in the U.S. in the first half of 2019.
Strategic Rationale for Transactions
This transformative acquisition and financing are driven by the shared vision held by pSivida and its new partners, EW Healthcare Partners and SWK.
- Ophthalmology represents a large and growing therapeutic category with a sizable market, favorable demographics due to an aging population, and significant unmet clinical needs.
- Dexycu offers a unique value creation opportunity, especially with the experience of pSivida’s CEO, Nancy Lurker, who has built multiple sales and marketing organizations that have successfully commercialized numerous products. The company is well positioned to capitalize on Dexycu and the potential Durasert opportunity.
- pSivida and its strategic partners will remain opportunistic in evaluating additional ophthalmology assets.
MTS Health Partners served as pSivida’s financial advisor in connection with the transaction and its affiliate, MTS Securities LLC, provided the pSivida board of directors with a fairness opinion. Torreya Partners served as the advisor to pSivida on the debt financing. Hogan Lovells US LLP acted as pSivida’s legal advisor and Danforth Advisors, LLC acted as pSivida’s corporate finance advisor.
EW Healthcare Investment
EW Healthcare Partners and a third party investor will provide pSivida with funding in two tranches totaling $35 million, approximately $25.5 million of which is subject to the approval of the company’s stockholders. EW Healthcare Partners and a third party investor also have an option, subject to the approval of the company’s stockholders, to make an additional investment of approximately $25.5 million for a total of up to $60.5 million.
- In the first tranche, which closed concurrently with the Icon acquisition, EW Healthcare Partners purchased 8,606,324 shares of pSivida common stock.
- In the second tranche, which is subject to stockholder approval, EW Healthcare Partners and a third party investor will purchase approximately $25.5 million of the company’s common stock and receive a warrant to purchase an additional approximately $25.5 million of the company’s common stock. The warrant will be cash-exercise only and exercisable no later than 15 business days after the issuance of a pass-through reimbursement code for DEXYCU.
Ron Eastman, a Managing Director with EW Healthcare Partners, who will immediately join pSivida’s Board of Directors, said, “EW Healthcare Partners is pleased to have the opportunity to invest in Nancy Lurker and her team as they drive the growth and transformation of EyePoint Pharmaceuticals into a fully integrated specialty biopharmaceutical company. Nancy has a strong track record of building successful commercial organizations, and we look forward to continuing to support the Company as it capitalizes on DEXYCU, Durasert and other potential ophthalmology opportunities.”
pSivida also entered into a $20 million senior secured, non-dilutive term loan agreement with SWK Funding LLC and its partners. SWK Funding LLC is a subsidiary of SWK.
“We are pleased to partner with pSivida and are fully committed to working with the team to build a leading business in ophthalmology,” said Winston Black, CEO, SWK. “Nancy has a proven track record of successfully commercializing products and we believe pSivida has a very attractive future.”
EyePoint Pharmaceuticals Marks the Transformation of pSivida
“Today’s announcements significantly accelerate the transformation of pSivida into a specialty biopharmaceutical company with the potential to launch two ophthalmic products in the first half of 2019 with the FDA approval of Dexycu, and active regulatory review of Durasert micro-insert for posterior segment noninfectious uveitis. Our goal is to leverage the commercial infrastructure we are building and become a sustainable growth company,” said Nancy Lurker President and CEO. “Our rebranding and name change reflect the tremendous progress we’ve made and embody the momentum at EyePoint Pharmaceuticals. Our goal is to establish EyePoint Pharmaceuticals as a leader in developing and launching innovative ophthalmic products in indications with high unmet medical need to improve the lives of patients with serious eye disorders. We are pleased to partner with EW and SWK to assure that we have not only the funding to achieve our goals, but also the deep strategic and healthcare domain expertise to ensure our ability to execute on our strategy.”
Dexycu is the first long-acting intraocular product approved by the FDA for the treatment of postoperative inflammation. Cataract surgery is the most frequent surgical procedure in the U.S., with over four million performed annually. The primary endpoint of the Dexycu placebo-controlled phase 3 program was to assess the percent of patients achieving total anterior chamber cell (ACC) clearance at post-surgical day 8. The percentage of patients with ACC clearance at post-surgical day 8 was 60% in the DEXYCU treated group versus 20% in the placebo group. The most commonly reported adverse reactions occurring in 5-15% of subjects included an increase in intraocular pressure, corneal edema, and iritis.
“Dexycu offers surgeons a new option to treat post-surgical inflammation with a single injection following surgery, thereby potentially eliminating the need for patients to administer a complex regimen of steroid drops for up to 4 weeks post-surgery which many patients have difficultly adhering to,” said Cynthia Matossian, MD, FACS, who is the founder and Chief Executive Officer of Matossian Eye Associates.
EyePoint Pharmaceuticals will trade under the new NASDAQ ticker symbol “EYPT” effective April 2, 2018. The former ticker symbol “PSDV” will remain effective through the market close on March 29, 2018. The new website for EyePoint Pharmaceuticals is www.eyepointpharma.com.