Biotech highflier Myogen ( MYOG) has just disclosed the resignation of a key executive in the equivalent of a regulatory footnote.

In an 8-K report filed earlier this week, Myogen revealed that founder Michael Bristow has vacated his post as chief science and medical officer of the company. Bristow will now serve as a scientific adviser while collecting the same $100,000 salary for as few as four hours of work per week. The move will permit him to focus on a newer biotech venture.

Over the years, Bristow has always been listed as a high-ranking officer -- second only to the CEO at times -- of the company that he founded 10 years ago.

Even so, Myogen simply announced Bristow's departure among "other events" in a recent filing devoted primarily to explaining the company's discretionary bonus program. Myogen had previously disclosed that Bristow might resign when announcing a business agreement with Bristow's new company in a separate 8-K filing last fall.

Bristow is now free to spend more time on that new company, known as Arca Discovery.

Even as chief science and medical officer of Myogen, Bristow had to work only eight hours a week. Myogen failed to return telephone calls from this week seeking information about Bristow's responsibilities at the company and who, if anyone, will be assuming them.

In the meantime, Myogen's stock has taken another big bounce. The shares, which have more than quadrupled over the past year, jumped 5.3% to $38.77 on Thursday following news about an upcoming drug presentation.

Locking in Profits

Nevertheless, Bristow has sold plenty of Myogen stock himself.

To be fair, he did reveal his plans in advance. Back in late August, he and four other Myogen executives -- including the CEO -- adopted prearranged trading plans to cut their stake in the company. They announced their intentions just one week after the company's stock rocketed nearly 70% in a single day on positive results from a drug trial.

Bristow's own plan called for selling up to 120,000 shares of stock over a six-month period beginning last October. It was in October that Bristow also arranged a new employment agreement with Myogen that paved the way for his resignation from the company.

Bristow has gone on to sell around $3 million worth of Myogen stock since that time. He pocketed half of that amount through a single transaction back in mid-December, selling 60,000 shares on a day when the stock jumped 50% on news of yet another positive drug trial.

Of course, Bristow has seen the company's stock tank when other trials have failed. Two years ago, for example, the stock plummeted 35% on disappointing results for a heart-failure treatment. Then last June, the stock tumbled again -- approaching a mere $5 a share -- after the company gave up on that drug altogether.

Lately, however, Bristow would have come out ahead by holding his Myogen shares instead. Even his most recent sale, carried out in early January, brought him just 75% of what he could get now.

Two Out of Three

After writing off one of its most promising drugs as a failure last summer, Myogen still has two potential blockbusters that could hit the market over the next couple of years.

Analysts expect the first, Ambrisentan, to become a favored treatment for pulmonary arterial hypertension after winning regulatory approval late next year. They have even higher hopes for the second, Darusentan, because it could emerge as the treatment of choice for a large crowd of patients who suffer from persistent hypertension.

"Darusentan is now presenting itself as a real shot-on goal for a potentially multibillion-dollar market opportunity," C.E. Unterberg Towbin analyst Andrew Fein wrote when initiating coverage on Myogen last month. "This is a patient population that is not only huge but also underserved and badly in need of alternative treatments."

Looking ahead, Towbin foresees Myogen generating $389 million in sales from Ambrisentan -- and a whopping $534 million from Darusentan -- by 2010.

For now, Myogen continues to post much smaller sales, and ongoing losses to boot. But Fein expects the bleeding to slow dramatically in 2008, when Darusentan should hit the market, and then finally give way to a nice profit in 2009 that could double the following year.

He recommends that investors buy the stock now before it reaches his current price target of $57 to $58 a share.

"Given that MYOG has two potentially best-in-class unpartnered programs, we believe that a steep valuation premium to its peers is warranted," Fein wrote in his Feb. 17 report. "We also note that several key catalysts remain ahead. ... Assuming positive news from each catalyst, MYOG's shares appear undervalued both near- and longer-term."

Part of Fein's report already looks dated, however. Notably, the report highlights Bristow as one of three key managers at the company.

Myogen itself has always singled out Bristow as an important player as well. During its most recent annual report, for example, the company says that its drug-discovery programs are "scientifically based on the discoveries of three prominent academic scientists" -- and then goes on to list Bristow as the very first.

To be sure, Bristow enjoys a clear record of success. He has published hundreds of journal articles and founded several companies -- with Arca becoming the latest -- over the course of his long and decorated career. Myogen has an equity stake in his newest venture.

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