It's been a riddle for pundits to argue over: How much do national and world events keep the biotechnology market down? Or, put another way: How bad would it have been otherwise?

Big, favorable news out of the American Society of Clinical Oncology meeting last month and the roaring success of the Biotechnology Industry Organization's 2004 meeting in San Francisco might have won places on the front pages in some instances, but mainly were overshadowed by war news out of Iraq.

Four initial public offerings left the gate in June, but none has done particularly well.

Inhibitex Inc. sold 5 million common shares at $7 apiece for $35 million, down from its previous asking range of $10 to $12, and 900,000 fewer shares than first planned. The first day out, shares rose 22 cents after climbing as high as $7.75 and never traded below the original price. However, by last week the stock had settled within pennies of the $7 tag, despite news that the firm had begun a pivotal Phase III trial of Veronate, its antibody-based investigational drug being developed to prevent hospital-associated infections in very low-birth-weight infants.

Metabasis Therapeutics Inc. raised $35 million in its June IPO for liver drugs, also selling 5 million shares at $7 each. But when the company filed in February, it was targeting as much as $86.25 million. The estimated price range later was cut, along with the planned number of shares to be offered, and the selling price ended up even lower than the new estimate. Metabasis last week was about 50 cents lower than its IPO starting price, having closed on the first day at $6.66.

The firm has the glucose pathway inhibitor CS-917, being developed in a deal with Sankyo Co. Ltd., in a Phase II dose-finding trial in Type II diabetes. Another compound, Remofovir (formerly known as Hepavir B) - which uses Metabasis' HepDirect technology to target the active form of marketed Hepsera with lower toxicity - is in Phase I/II trials for hepatitis B. The drug is being developed in collaboration with Valeant Pharmaceuticals Internat-ional Inc., which has licensed worldwide rights.

Momenta Pharmaceuticals Inc. is something of an exception to the sad aftermarket rule. The firm priced in June about 5.4 million shares of common stock at $6.50 apiece for $34.7 million, down from the estimate in late May of $13 to $15 per share, which would have pulled in $80 million. When Momenta registered in March, it was shooting for about $86.25 million. The company did well its first day out, rising $1.31, or 20.2 percent, to close at $7.81 - and late last week was sailing in the $8.50 range.

Applying the chemistry and biology of complex sugars to make drugs for cardiovascular diseases and cancer, as well as to improve therapeutic proteins, Momenta has as its lead product M-Enoxaparin, a "technology-enabled" generic version of Lovenox, the low-molecular-weight heparin from Aventis SA. The compound is scheduled to enter clinical trials later this year, and is being developed in a deal with Sandoz Inc.

Senomyx Inc. priced a $36 million IPO in June, selling 6 million shares at $6 each - having filed three months earlier to raise $97.75 million and later having set a per-share price range of $13 to $15. The company, which develops flavor-enhancing products, saw its IPO price sweetened the first day of trading, when the stock closed at $6.75, up 12 percent. But late last week, it was near the opening price again.

There's no question that national and international news can make investors skittish, and maybe more so than they need to be. Can close-range, specialized news provide a boost? Many recall the 1998 run-up of EntreMed Inc.'s stock, when a Sunday story in the New York Times pointed to preclinical mouse data regarding the company's anti-angiogenesis proteins - and EntreMed's shares quadrupled their price, soaring from about $12 one Friday to more than $51 the following Monday. EntreMed's fortunes have slid since then; late last week, the stock was trading at about $2.

It was hardly news of Times magnitude, but a study disclosed last week might have offered some benefit to Avanir Pharmaceuticals Inc., which is developing Neurodex, an orally given version of the cough medicine dextromethorphan (DM, the active ingredient in Robitussin DM) combined with the enzyme inhibitor quinidine sulfate, which sustains elevated levels of DM in the body.

Keeping levels high is the challenge to making DM work, since, as Avanir's president and CEO Gerald Yakatan told BioWorld Financial Watch, about 90 percent of the population falls into the "fast metabolizer" category.

"You have a hard time getting significant blood levels and therefore getting the drug to the brain, where it has to get to work," he said. That's where quinidine sulfate plays an important role. The study that appeared last week in the July issue of Pediatrics found that DM as currently given is no better than sugar-water placebo for suppressing nighttime coughs.

Neurodex, though, is being advanced as a treatment of pseudobulbar affect, or PBA, characterized by uncontrollable laughing and crying, and afflicts about 1 million patients with amyotrophic lateral sclerosis (Lou Gehrig's disease), multiple sclerosis, Alzheimer's disease, stroke and traumatic brain injury. A Phase III trial just finished, with data due in about two months and a regulatory submission possible by the end of this year.

Avanir holds an exclusive license to develop, manufacture and market Neurodex not only for PBA but also for neuropathic pain, as well as for the weaning of drug-dependent patients from narcotics and antidepressants. A fourth indication covered by the license is chronic cough.

"I haven't really looked at that study [reported in Pediatrics] to see how they measured things," Yakatan said. "One of the reasons I didn't want to do anything is there hasn't been a cough medicine approved for a long time, so I'm not sure how the FDA would want you to conduct a trial."

Still, he said, the study "could have turned out entirely differently" if the DM had been formulated in a combination similar to the mix used in Neurodex.

Would Avanir consider developing a prescription cough medicine?

"Since we are required to do some pediatric studies at some point, it might be interesting to see if that would be a possibility, as well as doing PBA," Yakatan said. "But I'm very curious to see how the FDA would want to conduct a cough study. I don't know what their thinking is."

As an indication on top of PBA, he said, "I'd much rather get neuropathic pain, if I had a choice."

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