West Coast Editor

With what the company characterized as "overall positive" preliminary data from a Phase III trial of its imaging agent in hand and a second study under way, Acusphere Inc. is paying GE Healthcare $5 million up front - and as much as $15 million more later - for intellectual property related to ultrasound.

Wall Street seemed anything but thrilled, though, as Acusphere's stock (NASDAQ:ACUS) closed Tuesday at $4.01, down $1.63, or 28.8 percent.

Under the terms of the deal with GE Healthcare, a division of General Electric Co., Acusphere paid $5 at signing and will pay another $5 million at the one-year anniversary of the agreement, with another $5 million due upon commercial approval of Acusphere's lead product AI-700, in the U.S. or Europe, and a final $5 million at the one-year anniversary of the approval.

In return, Acusphere gets the use of GE's ultrasound contrast agent patents in combination with Acusphere's lead candidate, AI-700, in the field of ultrasound contrast agents, as well as any patents that GE is granted in that field during the next 12 months. The agreement extends until expiry of the last of the patents that are licensed.

But investors likely were reacting more to the imperfect top-line Phase III data than the GE deal. Acusphere's "Real-time Assessment of Myocardial Perfusion-1," or RAMP-1, study was designed to show that, for two out of three echo-blinded readers, AI-700-enhanced stress echo was non-inferior to the more expensive and less available nuclear stress method in measuring coronary heart disease.

Primary endpoints were accuracy, specificity and sensitivity, requiring p<0.025 for each.

The accuracy and specificity results beat the criteria for success, where three out of three readers met that standard for accuracy and two out of three surpassed the standard for specificity, defined as the ability to detect the absence of disease when it's not there.

Sensitivity results in RAMP-1, though, missed the criteria for success of the trial, with just one of three readers meeting the non-inferiority standard - with "sensitivity" defined as "the ability to detect disease when present."

AI-700, which consists of microspheres filled with gas to trace blood flow and examine heart-wall movement, was well tolerated in RAMP-1, the company said.

John Thero, chief financial officer of Watertown, Mass.-based Acusphere, said the company is pleased with the results but said a "period of understanding" might be necessary before the market follows along.

"With a diagnostic, it's not quite the black-and-white case of, does the drug work or not," he noted. "Different patients have different needs."

Sherri Oberg, president and CEO of Acusphere, called accuracy the "most important endpoint in terms of moving forward to filing" the new drug application.

"Of course, we would have liked to have hit all three of our endpoints, but we continue to believe that AI-700 can be just as sensitive as nuclear stress testing," she told investors during a conference call. Acusphere hopes to prove as much in the RAMP-2 Phase III trial, which has completed enrollment with results expected in the fourth quarter.

Roxy Senior, lead investigator in RAMP-1, said during the conference call that "so long as the test is accurate, we can balance the [other two factors]. If the test is not accurate, then whatever you do, most of the time you will be wrong." Results were disclosed during the annual scientific sessions of the American Society of Echocardiography in Baltimore.

Enrollment in RAMP-2 is complete, and results are expected in the fourth quarter. Oberg said results from RAMP-1, which still are being analyzed, will be incorporated into the statistical plan for RAMP-2.

Though officials did not provide details, Oberg said the second trial is "positioned for success" with no changes at all.

Thero told BioWorld Today that the difference in trial designs "gets into a history of discussions with regulatory authorities to ensure that we got an adequate mix of different patients."

An important difference between RAMP-1 and RAMP-2 is that the first used nuclear stress as the truth standard, "though nuclear is not accurate 25 percent to 30 percent of the time," Thero said.

In RAMP-2, angiography will be used as the truth standard for all patients, whereas it was used for only 42 percent of patients in RAMP-1.

Oberg put the market for AI-700 at about $2.4 billion, assuming a price of $200 for the drug, though reimbursement guidelines provide for payback of up to $250. The agreement with GE lets Acusphere avoid litigation with the mighty opponent, while clearing the way for deals.

"There have been a number of partners that we've had discussions with in the past who have been excited about our product but concerned about the intellectual property risk," she said, noting that the summer 2004 European-licensing deal with Nycomed Group, of Roskilde, Denmark, worth up to $70 million, came only after calming Nycomed's worries in that regard. (See BioWorld Today, July 8, 2004.)