Cardiome Pharma will likely be announcing a change in ownership for the U.S. rights to the I.V. version of its cardiovascular drug vernakalant by the end of the first quarter, CEO Doug Janzen told analysts on an earnings call.

Currently, Astellas Pharma owns the U.S. rights to I.V. vernakalant, which is in clinical development for the rapid conversion of atrial fibrillation to sinus rhythm in adult patients.

The development program in the U.S., however, has run into several regulatory setbacks, most recently involving safety issues in a Phase III trial. Astellas has not said much publicly about the program, and Janzen was first to indicate that it might be for sale.

Astellas did not return requests for comment about the status of the program. Merck & Co. holds ex-U.S. rights to the drug, as well as a license for an oral formulation that is in Phase I/II development, leading some analysts to speculate that it would be the logical acquirer.

The I.V. formulation is already approved in the EU, Iceland and Norway, where Merck launched it in 2010 under the brand name Brinavess (vernakalant). Merck would not comment on whether it is interested in obtaining U.S. rights to intravenous vernakalant.

"Certainly we've been public in disclosing our interest in pursuing the Astellas rights to Kynapid," said Janzen on the March 10 call. "And I think people can speculate whether there are other parties who would share that interest. It would likely make sense for whoever is going to be the owner of those rights to dictate what next steps forward are with that program and with FDA. So, I think we're hopeful that by the time we get together for our next conference call, all will be clear regarding the Kynapid filing."

Fujisawa Healthcare, which later became part of Astellas, paid $10 million upfront in 2003 for the drug, which, if approved, will be marketed as Kynapid. It wanted to expand its U.S. cardiovascular portfolio which already included the coronary artery vasodilator Adenoscan and an adenosine injection called Adenocard used to restore normal heart rhythm in patients with paroxysmal supraventricular tachycardia.

FDA's Cardiovascular and Renal Drugs Advisory Committee recommended approval of vernakalant, a mixed ion channel antagonist, for a limited indication in 2007. FDA subsequently issued an "approvable letter" in 2008 due to a lack of safety information and requested Cardiome and Astellas conduct an additional Phase III trial to study the narrower population - patients with recent onset AF who do not have a history of heart failure (Also see "Cardiome/Astellas' Kynapid Approval Seems Likely For Limited Indication, If Additional Trial Holds Up" - Pink Sheet, 11 August, 2009.).

The ACT5 trial, as it is known, began in 2009 but Astellas halted it in late 2010 after one patient who had received the drug went into cardiogenic shock. The program has yet to move forward due to requests from FDA for more information about the incident.

Vernakalant Has Potential To Be First-In-Class For AF

Merck paid $60 million upfront ([See Deal]) for the ex-U.S. rights to I.V. vernakalant in 2009 and in addition, received worldwide rights to an oral version of the drug intended for the potentially more lucrative indication of normal heart rhythm maintenance and prevention of attacks in AF patients.

Merck has said it only wants "best-in-class" drugs and views vernakalant as a means of pumping up its cardiovascular pipeline. Vernakalant has this kind of opportunity to be a best-in-class anti-arrhythmic against Sanofi's AF drug Multaq, which has safety and efficacy limitations, said Leerink Swann analyst Joseph Schwartz in a recent note. To date, neither Merck or Astellas has announced plans for head-to-head studies of the two drugs, however.

"We believe that Merck is likely in negotiations with Astellas to consolidate both I.V. and oral vernakalant rights," wrote UBS analyst Christopher Schaefer. "We would view this as a positive as we believe Merck would be more efficient in moving the program forward."

Cardiome management has stated they believe the impact of a "Dear Doctor" letter sent by the European Medicines Agency reminding physicians that any patient receiving Brinavess should be frequently monitored during administration of the medicine and "up to two hours [of monitoring] won't be as impactful to sales as speculations have been on the Street," wrote Schwartz. "Even if IV vernakalant is only a $250 million opportunity, that should translate into royalties of $75 million per year until 2025 [for Cardiome]."

Vernakalant should prove to be a potentially superior therapy for conversion of AF to normal sinus rhythm because of chemical properties that may selectively target the heart's upper chambers, analysts have written. Most analysts point out that AF is a significant market opportunity, as it is the most commonly diagnosed arrhythmia in the U.S. with an estimated prevalence of roughly 2.5 million patients.

For the full year, Cardiome reported profits of $35.5 million, or 58 cents per share, on revenues of $66.1 million, compared with earnings of $2.4 million, or four cents per share, on revenues of $50.2 million in 2009. The increase in income was largely due to recognition of a $30 million milestone payment from Merck for the E.U. approval of vernakalant and payments from Merck pursuant to the 2009 collaboration and license agreement, the company said March 10.

-Lisa LaMotta (l.lamotta@elsevier.com)

Astellas Likely To Cede U.S. Rights to Vernakalant, Cardiome CEO Says

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