Lpath Inc. (LPTN) is an early-stage biotechnology firm focusing on the discovery and development of monoclonal antibodies targeting bioactive lipids. In the current landscape saturated with protein-centric drug development efforts, Lpath stands out as a category leader in the field of lipidomics. It currently has two Phase II drugs in its pipeline, and trades with a market cap of $65.25M.
To date, Lpath is the only company to have developed functional therapeutic monoclonal antibodies against lipids. This is made possible by their proprietary ImmuneY2TM platform developed by its founder, Roger Sabbadini, Ph.D. With this technology, Lpath is capable of expanding the company's pipeline of monoclonal antibody candidates to target other bioactive lipids in disease. Moreover, Lpath is in partnership with Pfizer (PFE) for its lead antibody, iSONEP and the first right of refusal agreement for ASONEP, which are both in Phase II trials for wet age-related macular degeneration (AMD) and renal cell carcinoma (RCC), respectively.
Age-related macular degeneration is a leading cause of adult blindness in industrialized countries. It is a chronic condition affecting the macula, a spot near the center of the retina specialized for high visual acuity. There are two basic types of AMD: dry and wet. Dry AMD is by far the more common (90%) and progresses gradually, whereas wet AMD can cause rapid vision loss and accounts for 90% of severe vision loss caused by macular degeneration. In wet AMD, blood vessels grow abnormally under the retina in a process known as choroidal neovascularization (CNV). Blood or fluid may leak from these newly grown blood vessels, and lift the macula up from its normal position, thus distorting or destroying central vision.
AMD affects a significant number of people aged 40 years and above. US National Eye Institute's Prevalence of Blindness Data show that ~ 1.7 million people (1.5% of the age group) have advanced AMD, amongst which about 1.1 million have wet AMD (Selvaraju and Chen, Aegis Capital Corp, 2012). This number is projected to increase to 2.9 million by 2020 (National Eye Institute). Similarly, Owen et al. found that in the UK population aged above 50 years, 2.4% (~ 500,000 patients) have late stage AMD, about half of which (~250,000 patients) have CNV.
Currently there is no cure for AMD. For wet AMD, there are currently two main treatment options: laser treatment and VEGF inhibitors. The first laser treatment, laser photocoagulation, is limited in effectiveness and may cause macular scarring and additional vision loss (macular.org). The newer Photodynamic Laser Therapy uses the light-activated drug Visudyne to selectively destroy CNV upon laser irradiation. However, its use is limited to a subtype of wet AMD, or a quarter of the patient population. Furthermore, it is mostly palliative, does not restore lost vision, and CNV may recur and require repeated treatments.
The other type of treatments originates from the discovery made in cancer research that the protein Vascular Endothelial Growth Factor (VEGF) promotes the growth of blood vessels. Inhibiting VEGF thus may prevent and disrupt CNV. Presently four VEGF inhibitors are in use: Macugen, Avastin, Lucentis, and Eylea. Macugen is a small molecule (single strand aptamer) and was first approved in 2004. However, it loses market share to Lucentis ($1.6B of US sales in 2012) and Avastin due to the superior effectiveness of the latter. It is noteworthy that Avastin is not officially approved by the FDA to treat wet AMD, so is used off-label. Nevertheless, it was shown to be as effective as Lucentis, but is significantly cheaper (see Table 1). Therefore it became strongly preferred by US retinal specialists (63% patient share vs. 23% for Lucentis). This contrasts with the situation in EU5 (France, Germany, Italy, Spain, and UK), where 66% of patients were treated with Lucentis, compared to 27% with Avastin. Eylea, approved in 2011, is a synthetic fusion protein, and has a bi-monthly regimen compared to the monthly injections required by Lucentis (although in practice the average patient receives Lucentis bimonthly, see notes to Table 1). This may underlie the success of Eylea, which sold $837.9 million in the US in 2012.
The product iSONEP developed by Lpath takes a different approach. It is a monoclonal antibody against a lipid, sphingosine-1-phosphate (S1P). S1P is linked to several molecular pathways in addition to VEGF, and is implicated in inflammation, pathogenic fibrosis, and abnormal angiogenesis. Therefore anti-S1P treatment may address wet AMD-related vision loss by targeting pathologic disruption and remodeling of the retinal and sub-retinal architecture caused collectively by CNV, sub-retinal fibrosis, edema, and inflammation. This approach may either confer advantages over approaches that exclusively target VEGF, or act synergistically with anti-VEGF treatments. Indeed, Phase I trial of iSONEP demonstrated very encouraging outcome in patients who had failed to respond to Lucentis/Avastin; even a single dose of iSONEP may significantly reduce the CNV lesion size, which is typically unobserved with VEGF inhibitors. Notably, in two patients with retinal pigment epithelial detachment (PED, prevalent in 15-20% of wet AMD cases), a single dose of iSONEP led to near-complete resolution of the condition. While this was a small sample size, now iSONEP is undergoing Phase II trials in which its efficacy and safety with and without Lucentis/Avastin will be tested.
Potential Outcomes of iSONEP Approval
If the FDA eventually approves iSONEP, we can envision three scenarios. First, it may replace anti-VEGF drugs as the first-line treatment of wet AMD. Second, it may be used in conjunction with anti-VEGF drugs. Third, it may be used as a second-line treatment for patients who fail to respond to anti-VEGF drugs. In order to project the market size of iSONEP, we first estimate the current market size of its competitors. The current US sales volume of Lucentis suggests that about 800,000 doses were prescribed in 2012, which translates into ~130,000 patients (assuming six doses per year on average). The US preference for Avastin (see above) suggests that approximately 356,000 patients were treated in the same year. Eylea's sales volume translates into approximately 75,500 patients in 2012 (assuming bi-monthly injection). The total number of patients treated with these anti-VEGF drugs is thus about 561,000 in 2012. We assume a proportionate growth of the number of patients treated with anti-VEGF drugs with the total patient population.
The iSONEP is expected to launch in 2017. We project that in 2025 its market share will peak at 10% of the market currently captured by anti-VEGF drugs, and at 20% of the market currently not captured. We assume its cost to be $2,000 per dose, or $12,000 per year. Historical data suggest that a drug entering Phase II clinical trial has about 16% probability of eventual FDA approval. Taking all these into consideration and using a 20% discount rate, we project that iSONEP can contribute about 148.3 million USD to the NPV of the company, or $14.4 per share outstanding.
Cost / dose ($)
Annual Cost ($)
Photoactivated small molecule
3% vision improved
Small molecule binding to VEGF
6% vision improved (with early diagnosis)
Monoclonal antibody fragment against VEGF
40% vision improved
23,4001 or 12,8002
Monoclonal antibody against VEGF
Equivalent to Lucentis6
5953 or 3854
Synthetic fusion protein binding to VEGF
Comparable to Lucentis7
Table I. Currently available treatments for wet AMD
1,3: monthly injection; 2,4: injection as needed (on average 5 - 7 doses per year); 5: bimonthly
Renal Cell Carcinoma
Renal cell carcinoma is one of the ten most common cancers in both men and women and is the most common type of kidney cancer in adults. More men develop renal cell carcinoma than women. In the United States in 2013, there are about 65,150 new cases of renal cell cancer and 13,680 deaths. Since the late 1990s, the rate of people developing renal cell cancer has increased. One reason for this is likely the development of newer, more sensitive imaging tests.
Renal cell carcinoma can often be cured if diagnosed early and treated while the cancer is still localized to the kidney and surrounding tissue with surgery. When the cancer has spread beyond the kidney, there are five main types of standard treatment: surgery to remove the cancer, radiation therapy, chemotherapy, biologic therapy, and targeted therapy including monoclonal antibody therapy. Adjuvant therapies, which include a combination of the five standard treatments, are also used.
Currently, the FDA has approved 14 drugs for renal cell cancer treatment. Of these 14 drugs, three (Avastin, Sutent, Sorafenib) block angiogenesis. Recently, Axitinib (Inlyata) was approved for renal cell cancer treatment in 2012 for patients with advanced renal cell cancer and have had one prior systemic treatment. Patients treated with Axitinib had a progression free survival of 6.7 months, while patients treated with sorafenib, the standard treatment, had a progression free survival of 4.7 months. Axitinib is an oral pill that inhibits tyrosine kinases. Side effects, which are seen in about 20% of the patients, include weight loss, nausea, hypertension, vomiting, and constipation.
Injections of monoclonal antibody against VEGF.
Drug combination can increase progression-free survival time by 5.7 months.
Oral pill. Small molecule tyrosine kinase inhibitor.
Second in line treatment. Progression-free survival time extended by 6.7 months.
Oral pill. Small molecule against receptor tyrosine kinase.
Progression-free survival time extended by 6.3 months.
Oral pill. Small molecule inhibitor of VEGFR, PDGFR, and Raf kinases.
Progression-free survival time extended by 3 months. Standard treatment until Axitinib.
Table II. Leading Treatment Options for Renal Cell Carcinomas
ASONEP is an alternative formulation of iSONEP that also targets Sphingosine 1 Phosphate (S1P) using a humanized monoclonal antibody. Whereas iSONEP is administered ocularly for AMD, ASONEP is administered through intravenous infusion (Selvaraju and Chen, Aegis Capital Corp, 2012).
In animal models, ASONEP has been shown to achieve anti-angiogenic and anti-tumor activity. If this is the same case in humans, ASONEP may also help cancer patients overcome drug resistance as S1P is correlated with the development of drug resistance in multiple tumor types.
Lpath finished Phase I clinical trials for ASONEP in 2010 and found that ASONEP was tolerated at all dose administered. ASONEP was tested in cancer patients with various forms of late-stage cancer. From the Phase I data, ASONEP appears to have fewer adverse effects than Avastin, including no hypertension, no significant hemorrhage, and only infusion-related reactions at high doses (24 mg/kg).
Lpath is currently recruiting patients for Phase IIa clinical trials for ASONEP. Phase IIa trials started February 2013 and are expected to finish in March 2015. Eligible subjects include patients who have tumors that cannot be removed by surgery and patients who have failed three prior treatments including VEGFP and/or mTOR inhibitors. An estimated thirty-nine subjects have been enrolled in the trial for eight weeks. The primary endpoint that will be measured is progression-free survival of > 60% of patients. If this endpoint were met, it would allow a second cohort would start enrollment. If ASONEP shows no efficacy after the first cohort, the trial may be stopped. The trial will also be measuring safety and tolerability, pharmacokinetics through concentrations, tumor response rate, changes in selected markers, and changes in anti-drug antibodies. Pfizer has the first refusal rights to in-license ASONEP if initial Phase II trials of ASONEP look promising.
It is quite rare to see a company with a ~$65M market cap, a great business plan and positive characteristics for success in biotechnology. Lpath is likely to succeed for three reasons:
The lead candidate drug, iSONEP has a unique multimodal mechanism of action that demonstrated great efficacy and differs from the three leading products in the wet AMD market today. Moreover, the lead product targets a high value industry and indication (ophthalmology) that also has a lower risk profile due to the absence of systemic exposure. In addition, this is the first drug of its class, which would set the company as a leader in lipidomics; however, it may also face resistance from the FDA due to the same reason.
The monoclonal antibody technology platform ImmuneY2TM is unique in a niche environment. The technology directly targets the lipid rather than its downstream proteins, thus differentiating it from the strategies taken by most of the protein-centric companies. Moreover, lipidomics is a nascent field though research is progressing with new evidence of lipids as a potential therapeutic target; new product candidates and additional disease indications will emerge as research advances, which will serve the company well, a leader in this field. Currently, Lpath has two other candidate products in addition to its lead product, which is great planning and business management.
Lpath is in a high-value industry: Over the past decade multiple monoclonal antibody companies have been acquired in deals ranging from $1.1 to $15 billion (Selvaraju and Chen, Aegis Capital Corp, 2012). It is highly probable that Pfizer, having agreed on $497 milestone payment for Lpath's lead indication, would acquire Lpath upon favorable Phase II trial results. Such an early acquisition may enable Lpath to expand its pipeline with the current Immune Y2TM platform. Indeed, this partnership with one of the world's largest pharmaceutical companies indicates that the drug has a high chance of success. In addition, Lpath is expanding its revenue stream through partnership in diagnostics with Provista Diagnostics, which should generate enough cash until the projected approval and launch date of its lead product, iSONEP in 2017 or an acquisition bid after its Phase II trials by Pfizer