Companies desperate for a partner

Analysis

As investing in companies who have put all their resources behind the development of just one product becomes an even riskier business in the current regulatory and financial climate (One-product companies currently on a knife edge, November 27, 2008), EP Vantage has extended this analysis to highlight 22 companies with 100% of their value assigned to just one unpartnered filed or phase III drug, whose cash reserves are dangerously low and therefore are expected to be desperate for a deal of any sort.

Top of the list is Mannkind, who despite holding a respectable $95m in cash has burnt $90m per quarter so far this year and as such will be working overtime to secure a partner for their inhaled insulin product, Afresa. Other companies in the table (see below), such as Advanced Life Sciences, Bioniche Life Sciences and Repros Therapeutics are also drinking in the last chance saloon and will be praying that clinical data and regulatory reviews prove positive enough to clinch a life-saving deal.

Of the 35 companies originally highlighted in the previous story about one-product companies, the following table includes the 22 companies who have yet to sign a partner for their key drug in a major market. It also excludes Targanta Therapeutics and Arpida on the assumption that their antibiotic drugs have effectively failed to make the regulatory grade and therefore unlikely to attract any further interest.
 

Companies with a single product NPV = 100% of total NPV (ranked on years of cash)
  Company Product Product type Phase Today's NPV ($m) Latest Cash ($m) Years of Cash Market Cap. ($m) Partner comment
1 MannKind Technosphere Insulin System Inhaled insulin Phase III  2,307  95  0.0  335  
2 Dyax DX-88 Kallikrein inhibitor for hereditary angioedema Filed  770  75  0.1  172 Cubist Pharmaceuticals (N. America & Europe: prevention of blood loss during surgery)
3 Aastrom Biosciences Bone Repair Cells Stem cell therapy Phase III  200  19  0.1  55  
4 Introgen Therapeutics Advexin Anti-cancer gene therapy Filed  450  6  0.1  11  
5 Advanced Life Sciences Cethromycin (ABT-773) Ketolide antibiotic Filed  495  8  0.1  10 Wyeth (Asia ex. Japan)
6 Bioniche Life Sciences Urocidin Immunostimulant agent for bladder cancer Phase III  1,967  4  0.2  25  
7 La Jolla Pharmaceutical Riquent Immunosuppressant agent for lupus Phase III  367  26  0.3  38 Previous partner: Abbott Laboratories (WW)
8 Repros Therapeutics Proellex Progestogen modulator for uterine fibroids and endometriosis Phase III  483  9  0.4  133  
9 NeurogesX NGX-4010 Non-narcotic analgesic Filed  584  31  0.5  21  
10 OXiGENE Zybrestat Cytostatic agent for solid tumours Phase III  431  11  0.8  27  
11 Isotechnika Trans-ISA247 Immunosuppressant agent for psoriasis and transplantation Phase III  686  28  0.8  13 Previous partner: Roche (WW)
12 Vanda Pharmaceuticals Tasimelteon (VEC-162) Anti-insomnia agent Phase III  293  52  0.9  17  
13 Cougar Biotechnology CB7630 Cytostatic hormone antagonist for prostate cancer Phase III  715  106  0.9  487  
14 Somaxon Pharmaceuticals Silenor Anti-insomnia agent Filed  303  23  1.0  22  
15 Dendreon Provenge Prostate cancer vaccine Phase III  786  107  1.0  439  
16 Amsterdam Molecular Therapeutics Glybera Gene therapy for lipoprotein lipase deficiency Phase III  346  62  1.0  83  
17 NicOx HCT 3012 Non-steroidal anti-inflammatory agent for osteoarthritis pain Phase III  862  179  1.1  644  
18 TiGenix ChondroCelect cell therapy for knee cartilage repair and regeneration Filed  305  46  1.1  88  
19 Poniard Pharmaceuticals Picoplatin Platinum compound for lung cancer Phase III  560  84  1.5  99  
20 MolMed TK Leukaemia gene therapy Phase III  178  50  1.5  195  
21 Protalix BioTherapeutics prGCD Enzyme replacement therapy for Gaucher's disease Phase III  557  53  1.6  91  
22 Biodel VIAject Rapid-acting injectable insulin Phase III  1,086  71  1.9  59  

With the jury still out on Mannkind’s Afresa (MannKind keeps the faith in inhaled insulin, September 16, 2008), coupled with the high profile failures of Exubera and other inhaled insulin pipeline products, any partner is likely to wait until approval is granted.

Following Shire’s acquisition of Jerini and ViroPharma’s purchase of Lev Pharmaceuticals, Dyax remains the only independent company developing a new drug for hereditary angioedema, DX-88. Whilst a takeover remains a possibility, Dyax so far seems determined to commercialise its drug alone, although investors are likely to wait for approval, due in March 2009, before contributing more cash (Dyax looking strong ahead of second attempt in HAE race, August 19, 2008).

Of the companies with the smallest current cash reserves, Aastrom Biosciences, Advanced Life Sciences, Bioniche Life Sciences and Oxigene have all made it quite clear to the market that they are actively seeking a partner and are at various stages of discussions. 

As such, the phase III data for their respective products, or in the case of Advanced Life Sciences the FDA’s review of cethromycin for community acquired pneumonia, has to be positive otherwise even the short-term future of these companies will be in doubt.

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