Biotech Mailbag: Avoid Nuvelo-ARCA Merger

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Let's open this week's Biotech Mailbag with a commentary on a small merger in biotech-land.

Dore S. emails to ask for my two cents on Thursday's merger between Nuvelo (NUVO Quote) and privately held ARCA Biopharma.

This deal looks like a train wreck in the early planning stages. Excuse me for being so blunt, but privately held ARCA is run by Richard Brewer. This is the guy who sold Scios and its heart failure drug Natrecor to Johnson & Johnson (JNJ Quote) for $2.4 billion in 2003.

It was a fantastic deal for Scios shareholders, not so much for J&J because Natrecor ended up causing all kinds of bad side effects in heart failure patients, so much so that the drug was essentially (but not officially) yanked off the market. This was a total disaster and an embarrassment for J&J.

Now Brewer is back, essentially taking his private company public through the shell that is Nuvelo, a very down-on-its-luck biotech firm. The centerpiece of the newly combined company is another heart failure drug with the brand name Gencaro.

But do this, just look up Gencaro's scientific name, bucindolol on Google. When you do, you'll soon see that bucindolol is one stale drug. The ownership chain for bucindolol is too long to recount here, and the drug's phase III study, published in the New England Journal of Medicine in 2001, is decidedly unimpressive.

Here's the conclusion from that NEJM paper: "In a demographically diverse group of patients with NYHA class III and IV heart failure, bucindolol resulted in no significant overall survival benefit."

Now, ARCA has apparently wrapped bucindolol in a shiny new wrapper. The claim is that there is a genetic test which identifies a subgroup of heart failure patients who benefit from bucindolol. The drug is currently being reviewed by the FDA, with a decision date of May 31, 2009. If approved, doctors will have to first test heart failure patients with the genetic test to see if they're eligible for bucindolol. And bucindolol -- a branded drug with the added expense of a genetic test -- will have to compete in a heart failure market loaded with cheaper, generic drugs.

Brewer is a master salesman, so maybe he can pull this stunt off. I highly doubt it.