By Karen Young
AtheroGenics Inc. reacquired AGI-1067 from Schering-Plough Corp. in a move CEO Russell Medford said will allow it to more rapidly develop the compound, which is in Phase II trials.
Investors saw the move differently, with AtheroGenics¿ stock (NASDAQ:AGIX) dropping 39 percent in early trading Friday before rebounding some and ending the day off 33.9 percent at $2.71, down $1.39.
¿The purpose of this is to expedite¿ the continued clinical trials of AGI-1067, Medford said in a conference call Friday, explaining that the move to sever the relationship with Schering-Plough has ¿never been a disagreement on whether to continue development.¿
¿We have always felt that meeting our timelines for this promising compound . . . was aimed at building value for our shareholders,¿ Medford told BioWorld Today. ¿That is the most important part of this process.
¿From our standpoint this is very exciting news,¿ he said. ¿We are well positioned to take this next step, and I think the markets will respond as they should.¿
AGIO-1067 trials are focused on preventing post-angioplasty restenosis and the underlying disease of atherosclerosis. It is the company¿s lead vascular protectant compound ¿ one that is designed to block the expression of VCAM-1 ¿ and the company believes that decreased VCAM-1 expression will diminish atherosclerosis and restenosis.
The small-molecule compound has been returned to Atlanta-based AtheroGenics for all indications, and Schering-Plough no longer holds any interest in AGI-1067.
¿[The handing back of rights] was mutually agreed to, and it terminates our collaboration,¿ said Denise Foy, spokeswoman for Schering-Plough.
In the conference call, Medford said that Schering ¿was a good partner in starting the relationship and a good partner in concluding the relationship.¿
Medford and other company officials emphasized that AtheroGenics has ¿experience in all aspects of drug development¿ and that it has the resources necessary to continue development.
¿We¿ve completed a thorough financial review [and determined that we have] the necessary cash, personnel and resources,¿ AtheroGenics Chief Financial Officer Mark Colonnese said during the conference call, noting that the company can ¿advance with its own resources.¿
At the end of the second quarter, AtheroGenics had $68 million in cash after posting a net loss of about $7 million in the first half of the year.
¿[Ending the deal with Schering-Plough] will not result in a significant cash drain,¿ Colonnese said. Company executives also said they did not make any payments to Schering to have the compound returned. AtheroGenics had received nearly $12 million though the first half of this year from Schering, Colonnese said.
AtheroGenics has not changed its earnings guidance as a result of the news, and said this should not affect this year¿s numbers.
¿If it changes, we¿ll announce that shortly,¿ Medford said. ¿We do plan to put out some guidance for 2002.¿
When announced, it was projected that the deal with Schering-Plough could be worth $198 million to AtheroGenics. Madison, N.J.-based Schering-Plough assumed development costs and received worldwide rights to develop, manufacture and market AGI-1067 to treat and prevent restenosis in patients following angioplasty. Schering-Plough also gained rights to the drug for all indications, as well as other agents in a library of vascular protectant compounds. (See BioWorld Today, Oct. 29, 1999.)
Immediate next steps for AtheroGenics include two Phase II trials scheduled to be under way by year¿s end, Medford told BioWorld Today. These two trials will run in parallel to give the company the database it needs. The trials will address a post-operative restenosis dosing regimen and a long-term look at atherosclerosis. Data rollout will be in 2002 and 2003.
Medford said the company is still finalizing these protocols.
When asked whether the company would look for another partner, Medford responded, ¿The good news is that we do not have to make that decision today.¿
Medford said the company has the resources to get through the Phase II trials.
¿If I had to answer that today, probably we would partner through Phase III, but I can¿t forecast what is going to happen down the road,¿ Medford said.
AtheroGenics is scheduled to present the findings from its Phase II trial, known as the Canadian Antioxidant Restenosis Trial (CART-1), in November at the American Heart Association Scientific Sessions in Anaheim, Calif., to provide an analysis of the safety and efficacy data.