February 2006

EXTON, PA: As the first wave of Baby Boomers turns 60 this year, an estimated 35 million people are poised to develop vision-debilitating cataracts. Othera Pharmaceuticals believes that's 35 million people too many.

Othera is a specialty pharmaceutical company developing innovative drugs to treat and prevent eye diseases which are the leading cause of blindness and visual impairment.

"Cataracts are one of the top two leading causes of blindness," says David S. Joseph, Othera's Chairman and CEO. "The National Eye Institute spent years developing something called TP-H to arrest cataracts, but the compound could only be delivered into the eye via injection. Naturally, that wasn't going to work for the marketplace. We set out to modify the chemical to make it commercially viable."

Joseph and his colleagues believed the solution was to develop an eyedrop from the drug. In 2001, he went to BFTP and received $100,000 in funding for a feasibility study.

"The study results were so encouraging," says Joseph, "that we formed Othera and incorporated the company. In 2002 we acquired patent rights to TP-H and our scientists modified it to create OT-551."

Unlike the original TP-H molecule that requires an injection, the new formulation passes directly across the corneal barrier into the eye.

BFTP subsequently provided Othera with an additional $500,000 in funding.

"They were instrumental in our efforts to build and organize the company in the early days of the drug development," Joseph says.

Unexpected New Applications
OT-551 has proven successful both in arresting the progression of cataracts and in preventing them altogether. Not only that, while furthering its research on the cataract application, Othera discovered OT-551 may also work in combating the number one cause of blindness in this country—the "dry" form of age-related macular degeneration, or AMD.

Dry AMD affects some 10 million Americans. Preclinical research results indicate OT-551 aids in the treatment of early and advanced dry AMD by protecting against retina photoreceptor cell death and inhibiting angiogenesis (the growth of small blood vessels leading to the "wet" form of AMD).

"We started with one application in mind and have discovered various applications," Joseph says. "We're pretty excited about that. OT-551 is a novel small molecule with the unique ability to penetrate cell membranes and reach both the front and the back of the eye. To our knowledge, this is the only drug that can work with both diseases."

The company expects clinical trials for the AMD application to begin in the third quarter of 2006.

Othera, which currently employs 18 people at its Chester County firm, is also working on a different drug—OT-730—to prevent another leading cause of blindness—glaucoma. Currently, the primary treatment for glaucoma is a class of compounds known as beta-blockers.

"Conventional beta-blockers used to treat glaucoma have systemic complications and side effects," Joseph notes. "Our pre-clinical studies of OT-730 show that it operates like a beta-blocker without the side effects."

A History of Success
Recognizing Benjamin Franklin's role in the history of eye treatment—he invented the bifocal in 1784—Joseph appreciates the synchronicity of having BFTP play such an important part in Othera's success.

"Our work is an extension of what Ben did way back when," Joseph says. "We're still feeling his impact and influence."

In August 2004, Othera raised $13 million in a private stock placement. In June 2005, Joseph received the Raymond Rafferty Entrepreneurial Excellence Award from the Greater Philadelphia Venture Group. The award recognized Joseph's achievements in entrepreneurship for having founded four successful venture-backed companies as well as his impact on the ophthalmic and medical-technology industries.

The potential for Othera is huge, with the glaucoma treatment market estimated at $3 billion annually. "There are 35 million people soon to be at high risk for cataracts, and only 10 percent get surgery. If an eyedrop can slow or prevent progression, who wouldn't want to use it?" Joseph says. OT-551 is slated to be commercially available by 2009.