NitroMed Bets Big on Heart Drug

The biotech company revs up operations as hopes grow for the launch of its promising heart drug.
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Executives of

NitroMed

(NTMD)

said Wednesday they plan to have a marketing program in place by 2005's first quarter -- including as many as 200 sales representatives -- in anticipation of government approval for its drug that treats heart failure in African Americans.

Lexington, Mass.-based NitroMed electrified the medical community last month when it a halted a late-stage clinical test of its heart failure drug BiDil because an independent monitoring board said the drug provided a significant survival benefit. The clinical testing of more than 1,000 patients at 170 sites was halted so that the patients taking a placebo could receive BiDil. The monitoring committee said the results were so compelling that it would be unethical to prevent the placebo patients from taking BiDil.

The announcement not only boosted NitroMed's stock but also prompted the company to accelerate its commercialization plans "about a year earlier than we had anticipated," Michael D. Loberg, the company's president and chief executive, said Tuesday.

The accelerated marketing efforts include the hiring earlier this month of Mark Pavao as senior vice president of sales and marketing. Pavao comes from

Bristol-Myers Squibb

(BMY) - Get Report

, where he directed that company's roll-out of the schizophrenia drug Abilify. And on Tuesday, NitroMed announced that it had signed a deal with Publicis Selling Solutions, a New Jersey company, that will help it build a 200-member sales force quickly. "We have a unique opportunity here," Pavao said. "We will be launch-ready for the first quarter of 2005."

The company warned, in issuing its second quarter financial results Tuesday, that "total operating expenses will be higher than previously forecast and year-end cash will be lower than previously forecast" due to the stepped-up efforts to commercialize BiDil. All of this activity is taking place even though more detailed clinical test results won't be available until the fourth quarter. Loberg said the results will be added to the company's application to the Food and Drug Administration.

The medical landscape is littered with experimental products and encouraging test results that ran into regulatory delays, FDA requests for additional information or final FDA approval that narrowed the scope of a particular product. So it's not surprising that NitroMed continues to use the phrase "if and when" the FDA approves BiDil.

The drug presents an intriguing case because tests show that the drug -- a combination of two generic products -- has a significant impact only on African-Americans. Preliminary results announced in July when the clinical trials -- nicknamed A-HeFT, for the African American Heart Failure Trial -- showed BiDil not only produced a "statistically significant survival benefit" but also demonstrated fewer "serious adverse events and cardiovascular events."

During a telephone conference call with analysts and investors Wednesday, Loberg said BiDil has two key patents: one expiring in 2007 and one expiring in 2020. The latter patent is the crucial one, relating to NitroMed's effort to seek specific FDA approval for BiDil as a treatment for African Americans. "We know the patent to be valid, and we expect to defend it," said Loberg.

Once the FDA approves a drug for a single use, doctors may prescribe it for other diseases and conditions. But a company can only promote a drug for the specific indications approved by the FDA.

Although he declined to discuss pricing, Loberg said he expected the drug, if and when approved by the FDA, to gain acceptance and support from managed care companies and other insurers. Even though BiDil is a combination of the generic drugs isosorbide dinitrate and hydralazine, Loberg said he believed BiDil offers an advantage to patients. For example, patients with drug-coverage plans would have only one co-payment for BiDil instead of two for the separate generic drugs. He said it would be easier for patients to take a single pill than two drugs.

Loberg's remarks and NitroMed's latest financial results had a positive effect on the company's stock, which climbed $1.03, or 6.2%, to $17.78 Wednesday.

The company reported a loss of $4.7 million, or 18 cents a share, on revenue of $2.33 million for the three months ended June 30. For the same period last year, NitroMed lost $3.9 million, or $3.88 a share, on sales of $1.7 million. The higher revenue primarily reflects a payment from

Merck

(MRK) - Get Report

, which is collaborating with NitroMed on developing an improved version of a Merck's anti-inflammatory drug.

Because NitroMed isn't followed very closely by Wall Street analysts, Thomson First Call's consensus consists of only one analyst forecast which had predicted a second-quarter loss of $4.9 million, or 19 cents a share, on revenue of $2.25 million.