UPDATE 2-Ophthotech may get over $1 bln from eye drug deal with Novartis

Mon May 19, 2014 6:42pm EDT
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(Adds details, analyst comments)

May 19 (Reuters) - Ophthotech Corp said it could potentially receive over $1 billion in payments as part of a licensing deal for its experimental eye drug with Novartis AG .

Ophthotech's shares rose as much as 29 percent in trading after the bell.

The company said on Monday that a unit of Novartis will market its lead experimental eye drug, Fovista, outside the United States.

Ophthotech said it could receive immediate and near-term milestone payments of up to $330 million and is eligible to get ex-US marketing approval and sales milestone payments of up to $700 million.

The payments do not include future royalties from sales of the drug outside the United States, the company said.

"The deal validates Fovista, while importantly allowing the company to retain and fund the drug's development and US commercialization," J.P. Morgan analyst Geoff Meacham said in a note.

Ophthotech is testing Fovista in late-stage studies to treat wet age-related macular degeneration (AMD), in combination with standard treatments including Regeneron Pharmaceuticals Inc's Eylea and Roche Holding AG's Avastin and Lucentis.

Ophthotech said it expects initial data from Fovista's development program in 2016.   Continued...