ISTA Pharmaceuticals Inc. entered into a definitive agreement to acquire certain rights to three late-stage ophthalmology compounds from AcSentient Inc.

ISTA will pay Research Triangle Park, N.C.-based AcSentient $290,000 in cash and issue 100,000 shares of its common stock, which opened Monday at $1 per share. ISTA also agreed to issue up to an additional 200,000 shares of stock over time upon the achievement of certain milestones. ISTA has about 16.5 million shares outstanding.

Irvine, Calif.-based ISTA is acquiring U.S. product rights to bromfenac, a topical nonsteroidal anti-inflammatory compound for the treatment of ocular inflammations, and U.S. marketing rights for a new formulation of timolol, a beta-blocking agent for treating glaucoma. ISTA also gains worldwide marketing rights for Caprogel (aminocaproic acid), a novel compound to treat hyphema. AcSentient had acquired rights to the compounds from Senju Pharmaceutical Co. Ltd., of Osaka, Japan, and the Eastern Virginia School of Medicine.

“This adds three late-stage compounds, all in ophthalmology, to our pipeline,” ISTA President and CEO Vicente Anido Jr. said. ISTA said the product candidates complement its lead compound, Vitrase, for the treatment of vitreous hemorrhage. Pivotal Phase III trials of Vitrase were recently completed and the company is in the process of submitting a new drug application.

“It’s on a fast-track status, and we’ll be completing that filing in the late summer or early fall of this year,” Anido said.

In March, ISTA suffered some bad news as two pivotal Phase III trials of Vitrase for vitreous hemorrhage failed to meet the primary endpoint of a statistically significant ability to clear an eye hemorrhage to enable diagnosis or treatment. Based on the negative news, ISTA’s stock dropped nearly 70 percent. However, the trials did show that Vitrase produced visual acuity in patients and a decreased hemorrhage density.

The FDA then told the company it would consider visual acuity as the primary endpoint. (See BioWorld Today, April 11, 2002.)

“Obviously, with a little bit of luck, we could be marketing four drugs by the end of 2004,” Anido said. “This is an important first step in executing our strategy to become a specialty pharmaceutical company where we’re more dependent on revenues downstream.”

The new formulation of timolol, developed to be applied topically once a day, has shown in trials comparable efficacy and safety to the beta-blocker timolol maleate, which is applied twice a day. ISTA said an NDA submission by Senju would be based on preclinical studies and Phase I and II studies conducted in Japan, combined with data from a multicenter Phase III study recently completed in the U.S.

“That NDA will be filed before the end of this year,” Anido said.

Phase I, II and III trials of bromfenac have been completed in Japan, and ISTA plans to submit an NDA for bromfenac following successful completion of a single U.S. Phase III study in cataract patients. Calling it the most potent drug of its class, Anido said it is dosed twice a day compared to four times a day for those already on the market. The study is expected to be completed next year, with an NDA submission filed by the end of 2003.

Caprogel has received an orphan drug designation from the FDA to treat hyphema. Phase II and III studies of Caprogel have been completed and ISTA expects that one additional Phase III study, to be conducted by ISTA, will be required prior to the anticipated submission of an NDA.

ISTA plans to market the three new compounds on its own.

Near term, Anido said ISTA likely would raise additional funding before the end of the year, as its burn rate is slightly accelerated by the acquisition. He said the company had $11 million in cash at the end of the first quarter, enough to sustain its $1 million-per-month burn rate for the remainder of 2002.

Longer term, ISTA plans to continue acquiring late-stage products, complete their development and commercialize them.

ISTA’s stock (NASDAQ:ISTA) gained 1 cent Monday to close at $1.01.