ISTA Pharmaceuticals Inc and Allergan Inc have entered into a new agreement that replaces their previous Vitrase (hyaluronidase for injection; lyophilized, ovine) collaboration.

As part of the new agreement, ISTA has reacquired all rights to market and sell Vitrase for all uses in the United States and many other markets worldwide. Allergan retains an option to commercialize Vitrase for the posterior segment of the eye in Europe.

Under the new agreement, ISTA will pay $10 million to Allergan, of which $6.5 million will be payable within fifteen days, with the remainder payable subject to ISTA's completion of qualified financing. ISTA will also make royalty payments to Allergan on ISTA's US sales of Vitrase for use in the posterior segment of the eye. ISTA will have responsibility to file Vitrase for vitreous haemorrhage in the EU, and Allergan will have an option to commercialize Vitrase in Europe subsequent to EU product approval. If Allergan does not exercise its option, then such European rights will revert to ISTA, and Allergan will be paid a royalty on ISTA's European sales of Vitrase for use in the posterior segment of the eye.

"We are proud of our work with Allergan and pleased that our new agreement allows us to continue our relationship," commented ISTA's president and CEO, Vicente Anido, Jr. Anido continued, "Having recently received FDA approval for our first two products, Istalol, a once-a-day liquid formulation of timolol for the treatment of glaucoma, and Vitrase for use as a spreading agent, ISTA is now prepared to further accelerate its growth as a commercial company. During this quarter, we retained a 28-person sales force and launched Istalol in the US, offering patients a new therapeutic option for the treatment of glaucoma with the convenience of once-daily dosing. We also submitted a supplemental NDA for a 150 USP units/mL Vitrase product that we believe is optimal for use as a spreading agent."

"Allergan is pleased to enter into this agreement with ISTA as we continue our on-going efforts to support the discovery of therapies to treat retinal diseases," said F. Michael Ball, Allergan's Executive Vice President and President of Pharmaceuticals.

In March 2000, ISTA and Allergan began a collaboration in which Allergan received the right to market, sell and distribute Vitrase for uses in the posterior segment of the eye in the United States and all international markets, except Japan. In December 2001, ISTA separately granted to Otsuka Pharmaceutical Co Ltd exclusive rights for the development and commercialization of Vitrase in Japan.

ISTA's Vitrase is a proprietary formulation of highly purified ovine hyaluronidase, which has been studied for administration by injection into the vitreous of the eye. In May 2004, Vitrase was approved for use as a spreading agent. In addition, Vitrase has been studied for the treatment of vitreous haemorrhage and diabetic retinopathy.