Editor

Much of Wall Street kept busy late last week speculating about antibody-platform companies - specifically, which ones might be particularly enticing takeout candidates after New York-based Bristol-Myers Squibb Co.'s disclosure of the plan to buy Medarex Inc., of Princeton, N.J., for $2.4 billion. (See BioWorld Today, July 24, 2009.)

Plenty of other companies, though, are left out in the economic cold, finding themselves with approved drugs, no partner and dwindling funds. A special case, in more ways than one, is Vanda Pharmaceuticals Inc., the Rockville, Md., firm that - on the brink of liquidation in early May - saw its stock (NASDAQ:VNDA) explode by more than 600 percent, closing at $7.84, when the FDA cleared Fanapt (iloperidone) for schizophrenia. (See BioWorld Today, May 8, 2009.)

The news came less than a year after the agency declared the piperidinyl-benzisoxazole derivative "not approvable." No one really understood the reason for the reversal, nor did FDA wizards bother to explain, but apparently the mix-up had to do with the FDA's confusion when comparing Fanapt with risperidone, more commonly known as Risperdal, from New Brunswick, N.J.-based Johnson & Johnson.

Fanapt seemed to perform less well than risperidone, but mainly because the two drugs have differing rates of penetration, Vanda's reaching titration in four days and risperidone doing so in just one. When compared to a drug with a similar titration rate - New York-based Pfizer Inc.'s Geodon (ziprasidone) - Fanapt worked just as well.

Widely traveled Fanapt came out of Hoechst Marion Roussel (now Sanofi-Aventis Group, of Paris), and was licensed to South San Francisco-based Titan Pharmaceuticals Inc. in 1996, then sublicensed to Novartis in 1997, and ended up with Vanda in 2004. Vanda still makes payments to Novartis, which in turn has obligations to Titan.

But officially, there's no partner now. At the end of March, Vanda had not much cash, cash equivalents and marketable securities, either - about $42.6 million.

Of promise, though, the company has plenty. Oral Fanapt, a mixed dopamine D2/serotonin 5HT2A receptor antagonist, surely will be added by doctors to the array of atypical antipsychotics through which they typically cycle patients.

Intellectual property is solid, too, with patent protection that could last through 2016 with a Hatch-Waxman add-on of five years. The composition of matter patent for intravenous Fanapt, the intravenous form of which has reached Phase II, would last through 2022.

Late-stage in the Vanda pipeline is tasimelteon for the treatment of sleep and mood disorders, including circadian rhythm sleep disorders. The drug has completed Phase II/III trials in jet lag and is nearing Phase II in depression.

So distinct is Vanda's unenviable position that analysts at Leerink Swann have dubbed such companies "stalemated." Another likely soon to be in that position is Savient Pharmaceuticals Inc., of East Brunswick, N.J., which awaits an Aug. 1 FDA action date for Krystexxa (pegloticase), a pegylated porcine uricase enzyme for treatment-failure gout. (See BioWorld Today, June 17, 2009.)

"It's a good takeout candidate," said Kimberly Lee, analyst with Wedbush Morgan Securities. Savient had about $58 million in cash at the end of the first quarter. "They're not as financially strapped as Vanda - we have them running out of cash by the end of this year. They have enough to get the drug approved and possibly to launch as well."

Krystexxa should appeal to companies with rheumatology compounds or an interest in orphan drug products. Likely suspects include Amgen Inc., Biogen Idec Inc., and GlaxoSmithKline plc. A partner or buyer might start working on an intramuscular injection of the drug, which could expand the reach of Krystexxa beyond those areas with I.V. infusion centers. Although a new route of delivery might bring more risk of immune-response problems, the broadened market could be worth the attempt.

Leerink predicts partnering and acquisitions - already aggressive in antibody platforms and elsewhere - will keep going through the rest of this year and into next, though most of the likely candidates for deals fall into what Leerink calls "unencumbered" rather than stalemated biotechs.

Savient arguably partakes of both categories, though probably not for long. Positions belonging to Savient's CEO, chief medical officer and chief financial officer lately have been vacated. Others at the company have stepped in to fill some roles, a fairly clear signal that the firm is "signaling that they could get acquired," Lee said.

"The fact that they may need to raise some money [for better footing in partnership or takeover talks] may put them at a slight disadvantage," Lee said, but Savient still is on better ground than Vanda. "They'll have time between now and the end of the year to do something," she said. "The story's pretty much de-risked now."