Ophthotech Posts Q3 Profit; Signs Research And Option Deal With AVEO Oncology

(RTTNews) - Ophthotech Corp. (OPHT) reported net income attributable to common stockholders for third-quarter ended September 30, 2014 of $10.9 million, or $0.31 per share, compared to a net loss of $18.4 million, or $10.26 per share for the same period in 2013.

Revenue was $39.6 million for the latest-quarter and related to the $50.0 million enrollment-based milestone that was achieved in September 2014 under Ophthotech's agreement with Novartis. The balance of the milestone payment was recorded as deferred revenue. The Company did not have revenue during the comparable periods in 2013.

Analysts polled by Thomson Reuters expected the company to report a loss of $0.62 per share and revenues of $8.02 million. Analysts' estimates typically exclude special items.

In a separate press release AVEO Oncology (AVEO) announced that it has entered into a research and exclusive option agreement with Ophthotech Corporation, under which it has provided Ophthotech an exclusive license to investigate the potential of AVEO's small molecule vascular endothelial growth factor (VEGF) tyrosine kinase inhibitor, tivozanib, outside of Asia for the potential treatment of non-oncologic diseases of the eye.

As per the terms of the agreement, Ophthotech is obligated to pay AVEO an upfront option fee of $500,000 to investigate tivozanib as a potential treatment for non-oncologic diseases of the eye. During the option term, if Ophthotech elects to continue development of the ocular formulation of tivozanib after its initial analysis, AVEO is eligible to receive up to $8 million in milestone payments based upon the achievement of specified research, development and business goals.

Ophthotech has the exclusive option, exercisable at its sole discretion, to obtain additional development and commercialization rights to tivozanib and products containing tivozanib for non-oncologic eye indications in territories outside Asia, subject to certain conditions, including outcomes of a proof of concept clinical trial and the negotiation of a definitive license agreement.

If Ophthotech exercises its option, AVEO would receive an option exercise fee of $2 million and could also receive clinical and regulatory-based milestone payments, of up to $50 million, sales based milestone payments of up to $45 million and royalties on product sales. Ophthotech is responsible for all research and development activities and costs, and upon exercise of its option, further development and commercialization activities and costs for tivozanib ocular indications. A percentage of all upfront, milestone and royalty payments received by AVEO are due to Kyowa Hakko Kirin as a sublicensing fee.