Ocular Therapeutix (OCUL) Stock Exploding On Collaboration Agreement


Ocular Therapeutix Inc (NASDAQ: OCUL)

Ocular Therapeutix is having an incredibly strong day in the market today, and for good reason, the company announced a new strategic collaboration that’s causing excitement among investors. Today, we’ll talk about the collaboration and how OCUL has reacted to the news thus far.

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OCUL Enters Collaboration Agreement

As mentioned above, Ocular Therapeutix is having an explosive day in the market today after announcing a new strategic collaboration, option, and license agreement. The agreement was signed with Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN). According to the release, the two companies will work together on the development of a sustained release formulation of the vascular endothelial growth factor (VEGF) trap aflibercept. The medication is designed for the treatment of wet age-related macular degeneration (wet AMD). The company will also be targeting other serious retinal diseases.

While the formulation the companies are working on together is still in preclinical development, REGN already has a version of aflibercept approved by the FDA for certain indications. The brand is known as EYLEA. As a result, OCUL has quite a bit to benefit from this partnership.

On the other side of the coin, OCUL has a lot to offer as well. The company is currently in the process of developing proprietary sustained-release hydrogel-based drug delivery depots for intravitreal injection. These depots can be formulated with both small and large molecule pharmaceuticals.

With REGN already having the aflibercept and OCUL already working on the sustained release side of the coin, this is a match made in heaven. At the end of the day, the two are working to put their strengths together to create a sustained-release formulation of aflibercept.

Where’s The Money?

According to the agreement, Ocular Therapeutics has the ability to exercise a key option. Upon exercising the option, the company will receive a payment of $10 million from Regeneron, at which point the company would be responsible for funding development through Phase 1. Regeneron has agreed to fund subsequent development and commercial costs.

Also under the terms of the agreement, OCUL would be eligible to receive up to $305 million in milestone payments if the treatment is successful. This total is comprised of up to $155 million in development and regulatory milestone payments, $100 million for the first commercial sale, and up to $50 million in commercial milestones.

Key Statement

Along with the announcement of the collaboration agreement, Amar Sawhney, Ph.D., President, CEO and Chariman at OCUL, had the following to offer:

We have made considerable progress in developing our protein drug delivery platform at Ocular Therapeutix, so it is good to see an industry leader such as Regeneron recognizing the potential of this technology… We are excited to partner with Regeneron to develop a potential first-in-class sustained release protein-based anti-VEGF hydrogel injection for wet AMD, DME, RVO, and other serious retinal diseases. This sustained release formulation could have the potential to significantly reduce dosing frequency and subsequently reduce doctor visits, thus reducing the burden of care for patients, caregivers and physicians, and may decrease the likelihood of certain side effects associated with frequent intravitreal injections.”

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How The Stock Reacted To The News

As investors, one of the first things that we learn is that the news moves the market. Any time positive news is released with regard to a publicly-traded company (like what was released today surrounding Ocular Therapeutix), we can expect to see gains in the value of the stock associated with the news. Well, that’s exactly what we’re seeing from OCUL today. Currently (10:46), the stock is trading at $7.49 per share after a gain of $1.18 per share (18.70%) thus far today.

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