Six months after its thrombolytic drug alfimeprase missed in two Phase III studies, Nuvelo Inc. said it intends to resume development of the drug, despite the loss of partner Bayer Healthcare AG.

The news sent shares of Nuvelo (NASDAQ:NUVO) falling 18.3 percent, or 61 cents, Wednesday to close at $2.73.

Alfimeprase, a recombinant direct-acting fibrinolytic, failed to hit its primary endpoint of avoiding open vascular surgery within 30 days of treatment in patients with peripheral occlusion (PAO) and missed the primary endpoint of restoring function at 15 minutes in a catheter occlusion (CO) trial. Those data, reported in December, prompted Nuvelo and Bayer to temporarily suspend enrollment in two additional Phase III trials in PAO and CO, pending further analysis. (See BioWorld Today, Dec. 12, 2006.)

"After completing comprehensive reviews of all available alfimeprase clinical data," the steering committee and data safety monitoring board "recommended that we move forward," Nuvelo Chairman and CEO Ted Love said during a conference call. He told investors that the company "remains committed" to testing alfimeprase in further trials, expected to start later this year in stroke, PAO and CO.

Only now, Nuvelo is going alone. Alfimeprase "no longer meets Bayer's criteria for collaboration," Love said, "based on timelines in immediately addressable markets outside the United States."

The companies' January 2006 deal involved Nuvelo licensing ex-U.S. development and commercialization rights to Bayer in exchange for up to $385 million in up-front and milestone payments. Leverkusen, Germany-based Bayer also agreed to pick up 40 percent of the global development costs. (See BioWorld Today, Jan. 6, 2006.)

Under the termination terms, Nuvelo agreed to waive a 12-month notice requirement and Bayer instead will pay a lump sum of $15 million. Love deemed that a "fair conclusion" in that it "gives [Bayer] some recognition and consideration for their substantial investment," while providing "us with financial support" to fund further alfimeprase development.

Nuvelo, which ended the first quarter with $134.8 million in cash, expects its operating expenses for the second half of 2007 to not exceed $30 million to $35 million. Further guidance will be reported during the company's second-quarter conference call.

The termination agreement also gives Bayer one more shot at the alfimeprase program, in the form of a one-time option to reacquire rights to alfimeprase upon Nuvelo's initiation of a Phase III pivotal trial in stroke.

The company expects to begin a Phase II proof-of-concept study, titled CANREROS-1 (Catheter Directed Alfimeprase for Restoration of Neurologic Function and Rapid Opening of Arteries in Stroke), in the second half of this year. If that trial yields positive data, "I'd imagine Bayer would want to opt back in," Love said. But even if Bayer declines, "we'd be in a good position to seek a new partner."

While Nuvelo continues advancing the thrombolytic agent in PAO and CO, the ischemic stroke indication represents the largest potential market, especially given that the only thrombolytic currently available to patients, tPA, must be administered within a tight three-hour window. The CANEROS-1 study is expected to enroll about 100 patients within three to nine hours of stroke onset to receive doses beginning at 1 mg, 5 mg and 10 mg. The company believes "a relatively small dose of alfimeprase will be efficacious," said Michael Levy, executive vice president of research and development. Alfimeprase is designed to work by directly degrading fibrin, a protein that provides the scaffolding for blood clots.

In the CO indication, Nuvelo expects to re-initiate its SONOMA-3 (Speedy Opening of Nonfunctional and Occluded catheters with Mini-dose Alfimeprase) trial later this year to evaluate alfimeprase at a single, higher dose (10 mg) and concentration (5 mg/mL) in up to 100 patients. Data from the Phase III SONOMA-2 trial, as reported in December, compared 3 mg of alfimeprase to placebo in 300 patients. While that dosage did restore catheter function within 15 minutes, it did not meet the "p-value" of 0.00125 required for trial success.

If SONOMA-3 results come back positive, "we expect that we will need two more trials at that higher dose, at least one of which would be placebo-controlled, to support registration" of alfimeprase in CO, Levy said.

For acute PAO, Nuvelo "has chosen to proceed cautiously in this indication," Levy said, after determining that the delivery method for PAO is "suboptimal." The company will close the trial it suspended in December, the NAPA-3 (Novel Arterial Perfusion with Alfimeprase) study and instead will start preclinical studies to identify a new delivery method.

In addition to alfimeprase, Nuvelo's pipeline includes rNAPc2, a factor VIIa/tissue factor inhibitor in midstage development in acute coronary syndromes and metastatic colorectal cancer, and NU206, a gastrointestinal epithelial growth factor in Phase I testing in cancer.