OC-02

With the Chinese drug market starting to bear fruit, Western drugmakers have looked to wiggle their way in, often leaning on local partners to do the grunt work on the ground. With so many Chinese companies playing the willing host, a fledgling startup with a Merck veteran leading the way will now take on another Western partner of its own. Ji Xing Pharmaceuticals has acquired the Greater Chinese rights to Oyster Point Pharma’s nasal spray for dry eye disease candidates OC-01 and OC-02 in exchange for $17.5 million in upfront cash and 0.75% equity in the emerging Chinese biotech, the partners said Thursday. The deal comes with $204.8 million in biobucks and serves as the second Western partnership for Ji Xing, an RTW Investments-backed company headquartered in Shanghai that emerged from stealth last month with an undisclosed B round in hand. Joe Romanelli The firm is helmed by Joe Romanelli, the former president of Merck China who oversaw the launch of 20 products in that region, including I/O superstar Keytruda and HPV vaccine Gardasil, which the biotech said was the biggest drug by revenue in China produced by a multinational. During his four-year tenure with the New Jersey drugmaker, Romanelli oversaw its evolution from the seventh-largest multinational drugmaker operating in China to the second by the time he jumped ship. “Stimulating natural tear film production may be a paradigm-changing way to treat dry eye disease, which affects more than 150 million patients in China,” Romanelli said about the Oyster Point deal. “We are excited to partner with the Oyster Point team, who are innovative pioneers focused on developing therapeutics for ophthalmic diseases, and bring both OC-01 and OC-02 to China.” Ji Xing’s other Western partnership, a licensing deal with Milestone Pharmaceuticals, is also for a nasal spray, this time for paroxysmal supraventricular tachycardia and other cardiovascular indications. The drug, dubbed etripamil, is currently in Phase III testing.

Oyster Point Pharma, based in Princeton, N.J., inked a license and collaboration deal with Shanghai, China-based Ji Xing Pharmaceuticals to develop and market OC-01 (varenicline) and OC-02 (simpinicline) nasal sprays for dry eye disease in Great China. Under the terms of the deal, Ji Xing picks up exclusive license to develop and commercialize both drugs in Greater China. Ji Xing is paying Oyster Point $17.5 million upfront in cash and up to 0.75% of shares in Ji Xing, half subject to a pre-specified vesting condition. Oyster Point is also eligible for up to $204.8 million in milestone payments as well as tiered royalties on future net sales of the drugs in Greater China. Ji Xing will manufacture the drugs locally in China and handle development and commercialization expenses in their licensed territory. “This agreement marks an important step toward providing OC-01 (varenicline) and OC-02 (simpinicline) nasal sprays to patients living with dry eye disease globally while strengthening our cash position,” said Jeffrey Nau, president and chief executive officer of Oyster Point Pharma. “We look forward to partnering with the team at Ji Xing to develop and potentially commercialize these novel therapies in the licensed regions.” On July 1, Oyster Point reported preclinical data in non-human primates and in lab assays evaluating OC-01 and OC-02 against SARS-CoV-2, the virus that causes COVID-19 and the Alpha and Beta variants. OC-01, a highly selective nicotinic acetylcholine receptor agonist, protested rhesus macaques against nasal infection of COVIDI-19. “We believe this is the first in vivo and in vitro data illustrating a nicotinic acetylcholine receptor agonists’ potential to inhibit viral entry and disrupt replication of the SARS-CoV-2 virus and variants,” Nau said. “We believe that OC-01 (varenicline) nasal spray has the potential to complement the current global vaccination strategy and prevent infection and reduce transmission of the SARS-CoV-2 virus with a mechanism of action that may have broad activity across multiple variants.” OC-02, also a highly selective acetylcholine receptor agonist, was tested against the Alpha variant in Calu-3 cell lines. It showed strong antiviral activity against the variants in cell culture. As a result of these tests and more data, the company believes more study is worthwhile in these drugs as antiviral agents for pre-exposure prophylaxis, post-exposure prophylaxis, and/or prevention of transmission of COVID-19. More research is being conducted. Neither has been approved by the U.S. Food and Drug Administration (FDA) for anything although the company has a target action date of October 17, 2021, for OC-01 for dry eye disease, with a planned launch in the U.S. in the fourth quarter if approved. Oyster Point also reported its second-quarter finances on August 5, with the primary focus on its preparations for the potential launch of OC-01. It has begun hiring sales representatives, with plans of hiring 150 to 200 sales staff. In addition to the deal with Ji Xing, it entered into a $125 million term loan credit facility with OrbiMed. It has also enrolled the first patient in the OLYMPIA Phase II trial of OC-01 for neurotrophic keratopathy. It has expanded its pipeline with Enriched Tear Film (ETF) Gene Therapy, OC-101. Preclinical research has shown 42-day proof-of-concept in vivo data, demonstrating a single injection into the lacrimal gland delivered the human Nerve Growth Factor (NGF) gene and resulted in a statistically significant increase of NGF in tear film compared to control. And in May, the company entered into a research partnership with Adaptive Phage Therapeutics for bacterial disease of the eye.