Staff Writer

Shares of AtheroGenics Inc. dipped 10 percent on news that partner AstraZeneca plc dropped the collaboration on AGI-1067, an atherosclerosis drug that missed its primary endpoint in a Phase III trial earlier this year.

The move was not wholly unexpected, given the Phase III miss and given that AstraZeneca is looking to fill its sparse development pipeline. The same day it ended the AtheroGenics partnership, the London-based pharma firm offered to buy MedImmune Inc. in a deal valued at more than $15 billion. (See story in this issue.)

With AstraZeneca dropping AGI-1067, the worldwide product rights return to AtheroGenics, which intends to proceed with development.

The company anticipates finalizing a development strategy in May and, though president and CEO Russell Medford said details won't be disclosed until then, he added that future work on AGI-1067 likely will focus on the product's "encouraging" data on cardiovascular disease and diabetes.

An oral, small molecule aimed at treating atherosclerosis, AGI-1067 failed to hit its primary endpoint in a 6,100-patient Phase III study. Initial data released in March indicated that the drug showed no difference to placebo in the time to first incident of a composite of major adverse cardiovascular events related to acute coronary syndrome.

Those events were cardiovascular death, resuscitated cardiac arrest, myocardial infarction, stroke, the need for coronary revascularization and hospital admission for unstable angina. That news sent AtheroGenics' stock (NASDAQ:AGIX) plummeting 60 percent to close at $3.09. (See BioWorld Today, March 20, 2007.)

But data did reveal that AGI-1067 had a positive effect on other predefined endpoints and disease states, including a reduction in composite endpoints comprised of cardiovascular death, myocardial infarction and stroke. Patients treated with the drug also showed improvement in glycemic control, a long-term complication of diabetes.

Medford said the company, which is meeting with regulators to determine a path forward, is still in the process of deciding which indications would be pursued with AGI-1067.

It's also "too early to talk about" whether Atlanta-based AtheroGenics might seek another partner for late-stage development and commercialization of AGI-1067, he told BioWorld Today, though he added that the company "has the financial resources to continue" and is "in good position."

AtheroGenics, which intends to report its first-quarter earnings later this week, posted a net loss of $20.7 million, or 52 cents per share, for the last three months of 2006. As of Dec. 31, the company's cash totaled about $152 million.

Shares of AtheroGenics (NASDAQ:AGIX) closed at $3.09 Monday, down 56 cents.

The deal with AstraZeneca, which was signed in December 2005 and marked the largest potential collaboration of that year, included a $50 million up-front payment to AtheroGenics, though most of the money was on the back-end of the agreement, including up to $650 million in commercial milestones, plus a stepped royalty rate on product sales. (See BioWorld Today, Dec. 23, 2005.)

Behind AGI-1067, the company is developing AGI-1096, an oral antioxidant and selective anti-inflammatory compound for transplant rejection. That product, partnered with Tokyo-based Astellas Pharma Inc., recently completed a Phase I study.

The company also has preclinical programs in rheumatoid arthritis and asthma using its vascular protectant technology.