NicOx/AstraZeneca: Transparency vs. Partnering

AstraZeneca's news that nitric oxide donator AZD 3582 had failed to reach a primary end-point in a Phase II trial sent originator NicOx's shares plummeting, as investors lost faith in the biotech's entire platform. NicOx is disputing the data's accuracy in an attempt to salvage investor confidence--and to survive. The events highlight the tension between Big Pharma's duties to investor transparency and to protect its biotech partners. They're also a reminder to biotechs that there's more to deals than just royalties.

AstraZeneca PLC 's unexpected announcement on February 18 that AZD 3582 had failed to meet a primary end-point in one of its Phase II trials for osteo-arthritic pain sent shares in French biotech Nicox SA through the floorboards (see Exhibit 1). Most of the smaller group's market value hung on the compound—a nitric-oxide derivative of naproxen—that it had out-licensed five years earlier [See Deal]. Based on promising Phase I trials, analysts had been predicting $1-2 billion in sales for the compound, granted it passed muster.

But the drug was also a proof-of-principle case for NicOx: the biotech's entire pipeline is based around the concept embraced within this lead candidate: grafting a nitric oxide (NO) moiety...

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