Germany’s Bayer (BAYRY) recently submitted an application with the European regulatory body seeking approval for marketing its VEGF (vascular endothelial growth factor) trap-eye treatment in the European Union (EU).
Bayer is seeking clearance from the European regulatory body to market the drug for treating patients suffering from the neovascular form of age-related macular degeneration (wet AMD).
Bayer’s application was based on positive results from the VIEW program (VEGF trap-Eye: Investigation of Efficacy and Safety in Wet AMD) which consisted of two studies, VIEW 1 and VIEW 2. The studies evaluated the efficacy of VEGF trap-eye versus Roche/Novartis’ (RHHBY/NVS) Lucentis (ranibizumab), an anti-angiogenic agent approved for treating wet AMD. Bayer/Regeneron’s eye treatment was found to be non-inferior to Lucentis.
Bayer is co-developing the candidate with Regeneron Pharmaceuticals Inc. (REGN). Per the agreement, Bayer is responsible for marketing VEGF trap-eye in ex-US markets on approval. The profit emanating from the sales of the candidate in those markets will be shared equally by the companies. However, the entire US rights pertaining to VEGF trap-eye lie solely with Regeneron.
We note that the VEGF trap-eye therapy is currently under priority review in the US for the treatment of patients suffering from the neovascular form of age-related macular degeneration. A response should be out by August 20, 2011. VEGF trap-eye, which is also being studied for other eye-disorders, represents significant commercial potential for the companies.
Our Recommendation
Currently, we have a Neutral stance on Bayer in the long run. The company carries a Zacks #3 Rank (Hold rating) in the short run. We have similar long-term and short-term stances on Regeneron.
BAYER A G -ADR (BAYRY): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis Report
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