Mati Therapeutics isn’t your traditional biotech startup

Not quite two years old yet, closely held Mati Therapeutics is conducting a pre-Phase 3 clinical trial with an ocular punctal plug delivery system (PPDS) that could become a preferred alternative to eye drops.

“Because of the Phase 2 trials conducted by QLT on this technology, we have a different risk-reward profile than a traditional biotech startup,” Mati founder, president and CEO, Bob Butchofsky, says in an interview with

Mr. Butchofsky knows the PPDS well. He is a former CEO of QLT (NASDAQ:QLTI; TSX:QLT), which is best known for developing the Visudyne photodynamic therapy to treat the wet form of age-related macular degeneration in 2001.

Austin, TX-based Mati acquired the PPDS assets from QLT in April 2013 as part of a strategic restructuring of QLT. Mr. Butchofsky also recruited the PPDS technical team from QLT as well as four former executives of QLT.

In the fall of 2012, QLT announced that two Phase 2 clinical studies demonstrated positive trends, with statistically and clinically significant findings, on the efficacy and safety of PPDS, using the ophthalmic drug, latanoprost (L-PPDS), in subjects with ocular hypertension and open-angle glaucoma. The two studies followed an earlier Phase 2 study that showed clinically significant lowering of intraocular pressure at four weeks with L-PPDS.

“We have a higher probability of success than a traditional biotech start-up because we are using a well-known, approved glaucoma agent – latanoprost,” Mr. Butchofsky contends. “The safety profile of L-PPDS is well established, with more than 570 trial treatments.”

Another plus for Mati, he points out, is that the PPDS platform technology offers multiple product opportunities, such as in glaucoma, post-cataract surgery, ocular allergies and dry eye disease. “Any disorder with chronic use of eye drops is an area where we could potentially apply this platform,” he adds.

Mr. Butchofsky explains that PPDS is a non-surgical alternative to eye drops. The plug containing latanoprost is inserted into the punctum portion of the eye and delivers the therapeutic to the tear film. “It is easily placed by an ophthalmologist, optometrist or supervised staff member, and a reimbursement code is in place for the procedure,” he adds.

Pfizer’s Xalatan latanoprost eye drops had peak sales of $1.7-billion in 2010 before going generic which, Mr. Butchofsky says, reflects strong demand for latanoprost therapy for glaucoma patients.

He says the advantages of L-PPDS over currently available eye drop therapies include: improved patient compliance by eliminating the need for self-administering their medication; consistent drug delivery, compared with over- and under-dosing of eye drops; and the potential for more consistent intraocular pressure lowering by reducing peak and trough effects of eye drops.

L-PPDS also is preservative-free, he notes, adding that long-term exposure to preservatives has been shown to cause damage to the cornea.

At a Stifel conference call last month, Dr. Richard Lewis, former president of the American Glaucoma Society, and currently president of the American Society of Cataract & Refractive Surgery, said punctual/implants plugs should be an important delivery mechanism in years to come.

Citing Mati Therapeutics and closely held Ocular Therapeutix, he said the use of punctual plugs to deliver drug could be highly attractive, given three-month, six-month or 12-month potential durations.

And given previous approvals of plugs, Dr. Lewis suggested that any regulatory pathway should be relatively straightforward. “Notably, retention of the punctual plug in the punctum seems to have improved, a limit to previous attempts at usage,” he added.

After acquiring the PPDS assets from QLT, Mati began manufacturing scale-up of L-PPDS for a planned Phase 3 trial with some 400 glaucoma patients. The manufacturing scale-up is set for completion before the end of this year, with the pivotal trial scheduled to begin in about 12 months.

The company currently is enrolling 100 subjects at 13 U.S. clinical sites in its pre-Phase 3 study, which is designed to demonstrate L-DDPS’ non-inferiority to timolol for the treatment of glaucoma. The comparative study against timolol gel should be completed before the end of 2014. “It will help us appropriately power the Phase 3 study,” Mr. Butchofsky suggests.

A successful pivotal trial would allow Mati to seek FDA approval in 2016, with a potential U.S. launch in late 2017. The company plans to retain the commercial rights for L-PPDS in the U.S.

Mr. Butchofsky figures that the peak annual U.S. and EU market potential of L-PPDS to treat glaucoma is in excess of $850-million. “We believe the market is going to shift to sustained delivery to treat glaucoma,” he adds.

In discussing the competitive landscape, Mr. Butchofsky says the company closest to Mati is Ocular Therapeutix, which is developing a bioerodable punctal delivery of travoprost. “The device has been tested in several single center studies, but until Ocular generates multi-center U.S. data, it’s hard to know what it has,” he suggests. “Ocular has stated that it plans a multi-center Phase 2 trial in 2014, but we have not seen any evidence that it has begun,” he adds.

Mati’s IP portfolio consists of some 400 filed U.S. and foreign patent applications, comprising 17 patent families. Approximately 39 patents have been issued and 96 are pending.

Mati is seeking to raise $15-million of common equity to complete its series A round before the end of 2014. The company has already raised $3.4-million, including $850,000 from management. Mr. Butchofsky says Mati needs a further $5-million to get into the pivotal trial.

“One line of thought is that if we raise $5-million, we might stop the funding until we get results from the pre-Phase 3 trial,” he says. “Then, we could either do a series B round at a higher valuation and/or consider an out-licensing partnership for the non-U.S. rights to L-PPDS.”

As part of the $5-million financing, Mati is reaching out to the ophthalmic community through OfferBoard, a web-based private placement portal that helps emerging growth businesses raise capital.

“Many of our initial investors were ophthalmologists,” Mr. Butchofsky recalls. “The PPDS story resonates with them, and they appreciate the unmet medical need of poor compliance with eye drops.”