Dry Eye on the Rise

Jim Gorman
Jim Gorman Director
September 12, 2019

You probably remember the commercial (it was one of the most memorable TV ads in 2013, according to Nielsen) for Restasis, an eye drop solution meant to reduce the symptoms of dry eye disease (DED). Perhaps you’re also one of the estimated 17 million Americas who suffer from the ailment, which is characterized by ocular inflammation and a reduced ability to create tears. It’s a common problem but one with few effective treatments. 

Indeed, a significant number of patients remain under-diagnosed and under-treated due to the lack of effectiveness of standard of care products. Plus, because dry eye disease encompasses a number of different underlying conditions, it is hard to diagnose and symptoms vary from patient to patient. 

Despite these challenges, Mizuho’s Biotechnology Analyst Difei Yang sees a significant opportunity for treatments that are able to display solid efficacy and safety in clinical trials.

Where we are now

In the past 20 years, only three drugs have been approved for DED treatment by the FDA: Restasis in 2002, Xiidra in 2016, and Cequa in 2018. While Restasis and Xiidra have seen commercial success (Restasis generated over $1.0 billion in sales in 2018), significant challenges remain around diagnosis and management of the disease. Varying symptoms (and a lack of objective indicators common to all patients) make diagnosis surprisingly difficult. Dry eye disease involves a wide range of manifestations and severities of the illness itself.

Efforts to diagnose the disease start with an assessment of patient’s symptoms, followed by an analysis for signs of ocular surface disease. Symptoms of DED may include stinging, burning, or scratchy sensation in the eyes, sensitivity to light, and eye redness, and signs of disease include increased osmolarity of the tear film (less water and more salt than typical tears) and inflammation of the eye’s surface. 

Unsurprisingly, the challenges that occur in diagnosis are ultimately mirrored during clinical development, the biggest difficulty of which is determining which endpoint is most relevant and for which specific patient population. Properly identifying the target Mechanism of Action (MoA) and selecting appropriate biomarkers and patients for trial can also prove to be difficult.

Challenges create opportunity

Research and interest into dry eye has been growing over time and new effective therapies will have significant growth opportunities in the near future. The potential is illustrated by the recent $5.3 billion acquisition of Xiidra, an FDA-approved drug indicated for the treatment of signs and symptoms of dry eye, by Novartis.

Research into DED has increased significantly in the past ten years and a growing pipeline of drugs in development holds promise for new treatments. Medications that address both signs and symptoms, are quick-acting, possess high tolerability, and demonstrate long-term safety are key factors for success. Finding effective treatments are becoming especially critical as incidences in DED increase as a result of aging populations, digital device use, and contact lens wear. 

Yang sees immense opportunity for DED and the pipeline of potential treatments. As more companies continue to move forward with clinical drug trials, Yang remains hopeful that effective, lasting treatments become available for all individuals suffering from this disease. 

Mizuho Americas is a leading financial institution comprising several legal entities that offer services which include corporate and investment banking, financing, securities, treasury services, asset management, and research. If you are interested in learning more about Mizuho's Equity Research offerings, please call Mizuho Securities USA LLC at +1-212-209-9300.

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