What a difference a few months makes. Outlook Therapeutics’ stock price plunged last August on the heels of top-line results from the NORSE 1 clinical trial, the first of three studies centered on ONS-5010/Lytenava (bevacizumab-vikg). Now, for the past month, analysts are giving Outlook a “buy” rating, citing a potential upside of more than 257%.
Outlook’s shares spiked last week after it completed a $35 million public stock offering and other placements bringing total proceeds to $41.6 million. The stock closed Monday at $3.31, far above its low of 64 cents last August. The company says the proceeds should provide enough capital to get through the filing of the Biologics License Application (BLA) with the Food and Drug Administration for ONS-5010. The filing is planned toward the end of the year.
ONS-5010 is the first ophthalmic formulation of bevacizumab – Genentech’s Avastin cancer drug, which is used off label for degenerative retinal disease after it’s repackaged by specialty pharmacies for intraocular injection.
Last Summer a Fading Memory
It’s far cry from last summer, when Outlook’s stock price dropped 37% after the company announced NORSE 1 study results, and then got worse from there. When the calendar flipped to 2021, however, shares rebounded. The study results may have disappointed investors initially because they didn’t produce a statistically significant difference between ranibizumab (Lucentis, Genentech/Roche) and ONS-5010.
But the goal of NORSE 1 wasn’t to produce statistically significant improvements over Lucentis akin to a typical Phase III trial. Rather, it was designed to show safety and efficacy and to support the design and protocol of NORSE 2, the pivotal clinical trial.
The ONS-5010 safety profile proved consistent with previous bevacizumab ophthalmology studies. ONS-5010 also showed positive trends in efficacy and no adverse events associated with inflammation in NORSE 1.
“NORSE 1 was truly a clinical experience study,” said Outlook CEO Lawrence Kenyon. “Because of the unusual nature of how bevacizumab is used, we were able to work with the FDA to design a program that allowed us to use as one of our two registration studies a small clinical experience study. Investors have continued to follow the progress, and they appreciate that we’re trying to solve a unique problem with ONS-5010.”
Meeting a Long-Overdue Need
Avastin, an anti-vascular endothelial growth factor (VEGF) therapy, is FDA-approved to treat metastatic colorectal cancer. The drug’s ability to reduce retinal edema and improve vision compares with other anti-VEGF therapies, and it remains a standard of care for age-related macular degeneration (AMD) and diabetic macular edema.
Outlook chief commercial officer Jeff Evanson said during an OIS Podcast that off-label Avastin use remains north of 50% of patients treated, compared with 30% of patients treated with aflibercept (Eylea, Regeneron Pharmaceuticals) based on Medicare data. Avastin is also reimbursed by payers and costs significantly less than other anti-VEGF treatments.
However, to use Avastin, retina specialists have to order it from specialty pharmacies, which repackage the drug from the FDA-approved vials for cancer into ophthalmic vials. The repackaging has created some public health concerns around safety and potency.
Outlook views ONS-5010 as a triple-win: It’s a branded product with validated standard of care. It solves the potency/safety concerns because it will be packaged in ophthalmic vials from the beginning. And it will remain significantly less expensive than other options.
“Our goal is to provide a responsibly priced, approved-GMP [good manufacturing practice] product that makes sense for a significant portion of wet AMD and other retinal patients,” said Kenyon.
While ONS-5010 does have a built-in market due to physicians’ longtime use of Avastin, Lucentis biosimilars may shake things up. The US patents on Lucentis expired last year. Eylea comes off patent in the US in 2023.
“The market for anti-VEGF retinal disease treatments is large and growing,” said Kenyon. “Approved treatments and biosimilars will both be part of the mix moving forward. ONS-5010 fits nicely within that market.”
This year Outlook will move much closer toward FDA approval under a BLA for ONS-5010. Both the NORSE-2 and the NORSE-3 studies are fully enrolled. The company expects to report top-line data from both studies later this year.
NORSE 2, powered for statistical significance, excludes patients with vision better than 20/50 at baseline, as well as patients who have received prior treatment for wet AMD. The study compares monthly dosing of ONS-5010 with the peer dosing regimen for Lucentis. NORSE 3 is an open-label safety study.
Kenyon said NORSE 2 enrolled 227 patients in about a year; NORSE 3 enrolled 195 patients in four weeks. “That indicates there is plenty of excitement for the potential option of an approved, GMP, responsibly priced bevacizumab,” he said.
Last week Outlook completed the $35 million public common stock offering that included participation by GMS Ventures and Investments, an affiliate of Outlook’s largest stockholder and strategic partner, BioLexis Pte. Ltd., as well as partial exercise of the underwriter’s overallotment option for an additional $3.6 million, which is expected to close today.
Outlook Therapeutics also closed the previously announced concurrent private placement of common stock to Syntone Ventures LLC, its strategic partner in China, for additional gross proceeds of $3 million.