Azura Opthalmics raises $20m from Brandon Capital, others for dry eye cure

October 17, 2017

One of the year’s biggest investments in an Australian biotech is for one of medicine’s great unsolved problems: dry eye disease.

Sydney-based Azura Opthalmics has raised $US16 million ($20.3 million) to advance clinical trials of a treatment for meibomian gland dysfunction (MGD), the culprit in more than 70 per cent of dry eye cases.

“Having dry eye is like having chronic pain on the surface of your eye,” Azura chief executive Marc Gleeson told The Australian Financial Review.

“MGD hampers the lives of 300 million people worldwide, yet despite significant efforts there are no pharmaceutical treatments available.”

Meibomian glands reside in the upper and lower eyelids and producing the oily outermost layer of a person’s tear film, called a lipid layer. An intact lipid layer ensures tears do not evaporate and keeps the eyes moisturised and nourished. If this layer is disturbed, it leads to tears evaporating too quickly, drying out the ocular surface and resulting in damage to the front of the eye.

Azura’s treatment hopes to repair meibomian glands whose oil production has been disturbed. MGD is most common in the elderly and post-menopausal women, and nothing is known to prevent its onset. This is contrast to the fastest-growing cause of dry eye disease – excessive time watching a screen – which causes people to blink less and change their focal point less, meaning less nourishment from the tear film.

An initial trial of MGD sufferers had produced “promising” results, Mr Gleeson said.

Azura’s Israeli founder, Yair Alster, decided to incorporate in Australia because of its regulatory support for clinical trials and the attractiveness of its research and development tax incentive.

“He’d done the early clinical work in Australia for his previous start-up Forsight Vision 5 (a glaucoma treatment sold to opthalmic giant Allergan for $US95 million last year), and was so impressed he’d decided to do it here again for Azura, even before I came on board,” Mr Gleeson said.

Azura will work with the University of NSW and University Of Melbourne on the next step towards approval by the US Food And Drug Administration, a ‘phase 2a’ trial on 120 MGD sufferers.

Azura’s latest funding, which was co-led by Melbourne-based Brandon Capital‘s Medical Research Commercialisation Fund, gives the start-up three years runway. However it would have to re-evaluate how much development happened in Australia if the government adopted a recommendation to cap the cash refund available under the R&D incentive to $2 million a year, with the remainder of claims to be treated as non-refundable tax offsets that can be carried forward.

“A level of cash refunds higher than ($2 million) is baked into the business plan, so we’d have to look at what we did here relative to other countries with incentives for R&D,” Mr Gleeson said.

However another advantage of Australian regulation would endure.

“There’s a pragmatic regulatory path here, which means you can get into the clinic a lot faster in Australia than many other countries,” said Mr Gleeson, who spent eight years in the US as a marketing executive for Allergan, and is non-executive director of another Sydney biotech hopeful, Elastagen.

“You can have more productive, earlier conversations with the FDA about the path to approval if you’ve got human data as opposed to just animal data.”

Mr Gleeson was reticent about how Azura’s treatment would repair malfunctioning meibomian glands, or even how the medicine would be administered, as patent protection was still being finalised.

Azura raised $US1.2 million in 2014 from US family office Ganot Capital and Israeli medical device investor Elron Industries. This $US16 million Series B round together gives Brandon Capital and co-investors TPG Biotech and Orbimed a significant minority stake in the company.

Michael Bailey
The Australian Financial Review
17 October, 2017

Brandon Capital is aware of scammers impersonating us - offering jobs and asking for bank details. We do not offer employment or ask for banking details via SMS, websites or phone calls. Do not provide any details and report to the relevant authorities in your location.