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Stock Watch: Pharma Castoffs Sink Without A Trace … Eventually

Big Pharma Usually Drops Drugs For Very Good Reasons

 
• By Andy Smith

When a small biotech company acquires a failed drug from big pharma and plans to repeat the clinical studies expecting a positive result, is that not a definition of insanity?

Stock Watch Image, Andy Smith
ANDY SMITH OFFERS A LIFE SCIENCE INVESTOR'S PERSPECTIVE ON BIOPHARMA BUSINESS

In 2006 I was almost convinced that the small biotech company Adherex Technologies, Inc. might do a better job with the drug eniluracil than GlaxoSmithKline plc (GSK). Eniluracil is an inhibitor of 5-flurouricil (5-FU) metabolism that GSK studied in combination with 5-FU in two Phase III oncology trials that unfortunately demonstrated inferiority to 5-FU alone. On the plus side, Adherex was funded by two blue-chip VC investors, GSK retained buy-back rights and a logical reason for the previous failures was an inflexible fixed dose combination. However, in 2007, Adherex bought-out GSK’s option for $1m and although its Phase III study was scheduled to start the same year, eniluracil has instead been licensed on to a succession of partners and its clinical utility remains to be established. (Also see "Adherex Eniluracil Phase III To Start Mid ’07; Firm Outlines Fixes For Failed GSK Trials" - Pink Sheet, 15 December, 2005.)

There are many other cases where a drug has been shelved by big pharma only for another (usually biotech) company...

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