Editor

As the hippies used to remark, it's a gas.

"It," in this case, is nitric oxide, often called by the forbidding acronym NO, which first gained public acclaim when its key role in erectile function was figured out - leading boatloads of aging flower children (and others) to say "yes" to Viagra, the potency blockbuster generically known as sildenafil citrate that works by inhibiting NO's breakdown in the body.

Scientists also have noted the role of NO in other conditions important to blood flow. The heart drug nitroglycerine, for example, performs its magic by generating NO to relax the walls of the coronary arteries and arterioles, thus relieving angina pain.

There's more. In the kidneys, NO released around the glomeruli capillaries is known to boost filtering processes and urine formation. NO also aids in the killing of bacteria within the lysosomes of macrophages.

But the big news about NO came last month, and presaged even more detailed good tidings come November. NitroMed Inc. said researchers stopped because of favorable results a confirmatory trial of BiDil, the oral NO-enhancing drug for African-Americans with heart failure that combines isosorbide dinitrate and hydralazine hydrochloride. The company's stock shot up more than 73 percent on the news, and full accounting of trial data is expected at the American Heart Association meeting in November, with marketing approval possible as early as the first half of next year - which would be a full year earlier than previously estimated.

The African-American Heart Failure Trial, called A-HeFT, was designed to evaluate the efficacy of BiDil taken daily along with the best current therapy for a population that suffers a disproportionate degree of heart failure. Stoppage of the study came after unanimous recommendations from both the Data Safety Monitoring Board and the trial's steering committee, although NitroMed would not discuss specifics.

What's known for certain is that the need is plenty large. Figures from the U.S. Census Bureau and the Centers for Disease Control and Prevention estimate that 750,000 African-Americans in the U.S. undergo heart failure each year, and the number is expected to grow to about 900,000 people by 2010. Deutsche Bank Securities Inc. pegged the market opportunity between $500 million and $700 million, although "some complicated things are involved," acknowledged senior Deutsche Bank analyst Jennifer Chao.

The New York Heart Association categorizes heart-failure cases into classes of severity. Class I patients show no symptoms when undergoing ordinary activities. Those in Class II are mildly limited in their activities, but comfortable at rest or with mild exertion. Class III is characterized by marked limitation of activity, and patients are comfortable only at rest. In Class IV are patients who manifest symptoms unless confined to bed or chair. Of those suffering from heart failure, 35 percent falls into Class I, the same percentage falls into Class II, 25 percent falls into Class III, and 5 percent falls into Class IV.

Deutsche Bank predicts fast penetration of BiDil into the last two groups.

Class III likely is to see 25 percent market penetration in 2005, 35 percent in 2006, 46 percent in 2007 and 55 percent in 2008. In Class IV, the drug likely is to get 35 percent market share in 2005, 49 percent in 2006, 55 percent in 2007 and 65 percent in 2008, according to estimates.

Sales in Class I would be slower, with 2 percent in 2006, 5 percent in 2007 and 8 percent in 2008. Class II would be somewhat better - 6 percent in 2005, 10 percent in 2006, 15 percent in 2007 and 20 percent in 2008.

It all adds up, according to Deutsche Bank, to forecast BiDil revenue of $122 million in 2005, $190 million in 2006, $269 million in 2007 and $347 million in 2008.

NitroMed's main competition in the space could come from overseas, albeit not soon. France-based NicOx SA is working with NO against various diseases and has potential products in the pipeline against the likes of peripheral arterial obstructive disease and chronic obstructive pulmonary disease - but nothing so far that might threaten BiDil's anticipated success in the marketplace.

If there's a weak spot in BiDil's hoped-for dominion, that spot could be patent protection, which NitroMed conceded in a recent financial report is "limited." BiDil is a combination of two generic drugs, the company pointed out, and "we may be subject to generic substitution or competition" with the resulting pressure on pricing since both of the drugs are marketed separately in dosages similar to those in the BiDil formulation.

Although no composition-of-matter patent covers BiDil, NitroMed has two issued method-of-use patents, one of which covers isosorbide dinitrate combined with hydralazine to treat heart failure in African-Americans. The patent, known as "463," expires in 2020. (The other, known as "179," covers the combo drug when used to reduce mortality associated with chronic congestive heart failure, and expires in 2007.)

"As a practical matter, we may not be able to enforce these method-of-use patents to prevent physicians from prescribing" the two drugs for African-American heart failure, even though neither is approved for such use, NitroMed warned in its report.

Hence analyst Chao's reference to "complicated things."

She estimated BiDil would be approved in the first half of 2005, and noted that the Hatch-Waxman Act could provide protection for the 179 patent through the first half of 2008. Experts, including the head of the A-HeFT trial's steering committee and the author of the BiDil patents, believe BiDil could become the standard of care three years after approval, said Chao, who owns none of NitroMed's stock, though Deutsche Bank does and serves as an investment banker to the company.

She conceded that "it's normal to say, Why wouldn't people just buy the generics currently on the market and save some money?' But we're talking about generics that cost about $3.40 per day," compared to an expected $4.70 for BiDil - with which patients and physicians likely are to have become comfortable with by the time a generic threat surfaces, she told BioWorld Financial Watch.

What's more, "the [generic] tablets need to be taken together, and compliance is a major issue."

For the BiDil naysayers, Chao blamed "a certain kind of cynicism that prevails on Wall Street, that has become a common thread in interpreting prospects."

Although it covers directly BiDil's efficacy for African-Americans, the 463 patent is a different animal from 179 because of "the unprecedented nature of the way the patents have been constructed. Typically, you try to continue to broaden your patent. In this case, they're narrowing it, so it's less clear what precedents secure" the protection.

However, evaluation of trials with BiDil in 2001 showed the selective benefit for African-Americans with heart failure, and that's where hopes lie for the drug - a fact that itself makes NitroMed's effort unique, Chao pointed out.

"This is the first time a trial has been subsetted by race, so there's a socioeconomic perspective that cannot be easily dismissed," she said. "No pun intended, but this is a drug with heart."

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