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*UPDATE From OCTANe’s Ophthalmology Technology Summit: Allergan Acts Like a Startup in Terms of Innovation and Disruption

Brent Saunders, CEO, president and chairman, Allergan

Innovation within the ophthalmology and optometry industries in general – and Allergan specifically – continues to be crucial, CEO Brent Saunders told attendees at OCTANe’s annual Ophthalmology Technology Summit on June 29. OCTANe is a life sciences and tech accelerator in Aliso Viejo.

Saunders was interviewed by Jim Mazzo, global president of ophthalmic devices at Carl Zeiss Meditec, a multinational medical technology company with global HQ in Germany. Mazzo remains an OC resident and works out of offices here and in the San Francisco Bay Area. Previously, Mazzo was at Allergan’s eye care division for 22 years and then founded AMO, a manufacturer of devices for eye surgeries in Santa Ana, which became J&J Vision last year after being acquired by Johnson & Johnson for $4.3 billion.

Saunders’ chat kicked off the summit. He discussed how the eye care market is still ripe for innovation and how Allergan’s Irvine location plays a key role in that.

Saunders said Irvine is still Allergan’s “home,” as a key place to recruit employees and continue building networks within OC’s entrepreneurial community.

(Allergan’s HQ is in Dublin, Ireland. Its U.S. base is in New Jersey. Its Irvine campus is home to the eye care commercial and R&D team, as well as the medical aesthetics and Botox therapeutics business. In 2015, it was acquired with agreement on both sides by Actavis, after deftly deflecting a hostile takeover attempt by Canada-based Valeant Pharmaceuticals International Inc. and activist investor Bill Ackman’s Pershing Square Capital Management LP.)

Innovation is critical inside Allergan to come up with with novel therapies and stay ahead of the competition, Saunders said. It’s also imperative to be on the lookout for innovation on the outside, in realms in which Allergan does not do discovery research, since there are so many more great ideas outside Allergan than the company could come up with on its own, he said.

Four Areas of Development

Allergan focuses on four areas of development: medical aesthetics, eye care, central nervous system disorders and gastrointestinal disorders.

Disruption in the Ophthalmology Market

Disruption is the name of the game for startups. Established pharma companies like Allergan – with 17,000 employees in 100 countries – have to be nimble and see how they can be disruptive to stay competitive. (The company was originally founded more than 50 years ago by pharmacist Gavin Herbert as Allergan Pharmaceuticals Inc.)

Saunders identified personalized medicine and gene therapy (opto-genetics) as current disruptors on the science side of ophthalmology.

In the case of opto-genetics, Allergan has a team in Irvine dedicated to eye care. It also has Retrosense Therapeutics, which it acquired in 2016, for its gene therapy approaches to serious eye conditions including retinitis pigmentosa. (That acquisition essentially entailed a $60 million upfront payment.)

“So we can understand genetic capabilities, without having to build a whole genetic lab here (in Irvine),” Saunders said.

Disruption on the commercial side entails looking at branding and marketing Allergan’s products in a whole new way.

For example, to be disruptive – which entailed breaking through barriers of bureaucracy for its medical aesthetics line – Saunders took a team – which included human resources, the general counsel and the CFO – to Pelican Hill Resort in Newport Coast for a few days a while back. He championed the case for shaking up the medical aesthetics market, a market that he said Allergan already claims a leading position in.

This led to mobilizing a team from within and outside Allergan to start thinking about innovations.

About 18 months ago, this group of 40 Allergan employees began fleshing out ideas at a location in Hudson Yards, N.Y., away from the “mothership” of Allergan’s Irvine location. (Hudson Yards has a high concentration of startups and innovative energy, according to Saunders.) The team included software engineers, beauty experts, consumer experts and members of BCG Digital Ventures, a corporate investment and incubation firm, with HQ in Manhattan Beach.

This team came up with 10 ideas. Allergan gave the thumbs up to five. Then Allergan recruited an experienced entrepreneur to lead the team in Alexandra Wilson, the creative powerhouse behind Gilt Groupe, a flash-sale site; GlamSquad, an early-stage mobile beauty-service startup; and Fitz, a combo of home organizer and styling service. All are based out of NYC.

Three of these ideas are almost ready to launch, Saunders said, declining to disclose specifics at this time.

“I’m not sure we could have focused on both driving the fast growth we enjoy today, and being a future disruptor at the same time, from the same (Irvine) location,” he said. “To disrupt, we needed to be willing to break through our own bureaucracy and that required putting a new team in a different location.”

Digital Impact

Digitization is affecting all industries these days, and Allergan is no exception. It affects R&D in the sense that Allergan needs data scientists to manipulate the vast amounts of information known as “Big Data” as well as bioinformatics, the science of collecting and analyzing complex biological data such as genetic codes. Going digital involves the commercial side in terms of enticing the next demographic wave of customers – millennials.

In 10 to 15 years, millennials will need eye care, Saunders said. And, since they typically don’t watch network TV, how do you reach them? That’s one of the challenges Allergan’s team of digital marketers is working on.

Academic Research

Allergan is always on the lookout for innovative treatments being investigated at universities. For example, it found one a few years ago in the form of a drug for depression, based on research from Northwestern University.

Rapastinel, and a follow-on oral compound, were acquired by Allergan when it acquired Naurex in 2015. They received what’s known as a “breakthrough designation” from the FDA in 2016. They’re now in phase III clinical trials for major depressive disorder. Phase III trials examine if a treatment is better than what’s already available on the market.

Naurex-co-founder, Joseph Moskal, is a biomedical engineering professor at Northwestern and director of the university’s Falk Center for Molecular Therapeutics.

Major investors in Naurex included Northwestern University (via its Innovation and New Ventures Office), along with Adams Street Partners and Baxter Ventures, to name a few.

At the close of the Naurex acquisition, Allergan spun-off Aptinyx, the Naurex discovery team, to allow it to continue its drug discovery work. Aptinyx, with HQ in Evanston, IL. ( also home to Northwestern University), is collaborating with Allergan on the discovery and pre-clinical development of some NMDA modulators, a new form of antipsychotics. Moskal is Aptinyx’s chief scientific officer.

Allergan has the right to in-license Aptinyx’s drug discoveries, as they progress. Earlier this year, Allergan exercised its option to acquire a drug candidate in the same NMDA receptor modulator family.

Rapastinel could be a “game-changing” treatment for depression, Saunders said at the ophthalmology summit. “If it works, we could have one of the best therapies for this in the world.”

Innovation Partnerships

Another example of an innovative partnership is when Allergan joined with Editas Medicine in an R&D alliance last year. (That entailed an upfront payment of $90 million for the development of five candidate programs.)

Allergan now has the option to license up to five genome-editing ocular programs and is responsible for development and commercialization of those products. Editas retains the option rights to co-develop and co-promote up to two of these products in the U.S.

One of the five is Editas’ lead program for leber congenital amaurosis, an eye disorder that primarily affects the retina. This therapy is currently in pre-clinical development.

Recent Developments

Most recently, Allergan got positive results for its two migraine drugs, which were in-licensed in 2015. One of these is Ubrogepant, for the acute treatment of migraines.

Its best-seller and claim-to-fame, Botox, was originally developed as a migraine treatment, and had the unintended bonus of eliminating wrinkles.

Innovation in Pipeline

Allergan has already announced five positive phase II clinical trial results this year, including Vraylar for bipolar depression and the first phase III trial of Bimatoprost SR (sustained-release) for glaucoma.

Predictions

Five years from now, the hot topics in ophthalmology will continue to be gene therapy; implants/pumps; and cures, as opposed to treatments, Saunders said. Ophthalmology is the “perfect lab” for many of these, he added.

“It just requires a completely different paradigm,” he said.

About The Author

Deirdre Newman is a veteran journalist, who's covered OC startups for two-plus years.

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