In a deal that could help move Allergan plc one step closer to its aspirations of launching 20 significant new drugs by 2020, the company agreed to pay privately held Mimetogen Pharmaceuticals Inc. $50 million up front for an exclusive license to develop and commercialize tavilermide (MIM-D3), a topical formulation of a small-molecule TrkA agonist for the treatment of dry eye disease.

Under terms of the agreement, Allergan will fund all phase III development of the drug and potentially pay Mimetogen more as it hits pre-agreed milestones. During an R&D day event Allergan held in Irvine, Calif., on Wednesday, the company said it plans to launch tavilermide in 2019 and expects it could achieve peak sales of $500 million to $750 million annually.

Shares of Allergan (NYSE:AGN) fell $1.62 to close at $307.69 Wednesday.

The deal arrives just a little more than a year after the expiration of an option Bausch & Lomb held on taking an exclusive license to tavilermide in dry eye, a time-limited opportunity it let expire, owing in large part to the program's lack of strategic fit for Valeant Pharmaceuticals International Inc., which swept up B&L in an $8.7 billion deal with Warburg Pincus in May 2013.

Mimetogen's president and CEO, Garth Cumberlidge, told BioWorld Today that his small team, three full-timers at the core of a virtual biotech, had always planned to take tavilermide through proof of concept in humans and then find a partner that "we believed understood the therapeutic area well, understood the regulatory environment well and – last but not least – had the commercial clout to do the product justice once it crosses the goal line."

"Going forward," he said, "we'll still be very much front and center in developing the asset. It will require a number of clinical studies, and there is still a significant amount of development work that needs to be done. That will be our continued focus." That focus will include moving tavilermide through two ongoing multicenter phase III dry eye studies being run by ophthalmic trial specialist Ora Inc.

Outcomes from the new trials will build on top-line data from the MIM-725 study, which Mimetogen shared in September 2014, demonstrating what the company said at the time were "excellent safety, comfort and tolerability profiles," along with significant improvements in both signs and symptoms with 1 percent tavilermide vs. placebo. At week eight of the 403-patient study, according to Thomson Reuters Cortellis Clinical Trials Intelligence, the pre-specified endpoints of both central and total corneal fluorescein staining were reported to be superior with tavilermide vs. placebo (p = 0.0134 and p = 0.05, respectively). The company also observed that the mean blurred vision (p = 0.0393), reading (p = 0.0433) and watching TV (p = 0.0046) scores were decreased compared to placebo, at week eight. The drug was also found to be well tolerated. (See BioWorld Today, Jan. 19, 2011.)

For Allergan, the asset fits into an evolving pipeline for dry eye, led by its efforts in a multidose preservative-free formulation of Restasis (cyclosporine ophthalmic emulsion) needed to fend off generic competitors. The company filed an application seeking FDA approval for that product Tuesday and said it expects the agency to take action on the application by a March PDUFA date. Another project, just ahead of tavilermide on the path to launch, according to Allergan, is the electroceutical Oculeve, a non-invasive nasal neurostimulation device that increases tear production in patients with dry eye disease.

"Over the next five years, the greatest level of innovation and change is going to take place in glaucoma and dry eye," said Bill Meury, president of Allergan's branded pharma segment, during the R&D day event. "We're essentially building a supermarket of options as it relates to dry eye. It's a multifactorial condition."

Dry eye is more common because of the aging population, the growing amount of screen time in people's lives – especially due to more time spent on smartphones and computers – and because vision correction surgery is more common as well, said Meury.