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March 21, 2006
Nitromed's Slow Decline
Posted by Derek
Nitromed is a company whose fame, such as it is, comes from the controversy over BiDil (which I wrote about here. It's a mixture of two generic hypertension drugs which more or less flunked the main parts of its original clinical trial, except in the cohort of black patients. You can get burned by subgroup analysis, but Nitromed persevered and last summer won approval for what was probably the first race-based pharmaceutical.
The problem is, it's expensive to launch and promote a drug all by yourself, and BiDil turned out not to sell the way that optimists both outside and inside the company had hoped. The company has had a hard time convincing health insurance organizations to pay for the drug, and they've made noises about how their contract sales force hasn't performed up to expectations. Nitromed hasn't made a dime of profit since BiDil came on the market. The stock was at about 19 when the FDA approved the drug late last June, and rose as high as 24 and change a month or so later. Since then, though, it's been a long, slow slide downhill. (Try Google's new finance section for a neat chart). One wonders if they were able to unload a proposed stock sale back in January at their planned price or not.
Today came the abrupt word that the company's CEO and CFO have resigned, no reasons given. But no reasons had to be, did they? The stock's been rising a bit, apparently from bottom-fishers hoping for a takeover. But who's going to do that? BiDil really doesn't look like a winner so far, and I don't think the company has all that much more to offer besides hopes and dreams. Doubtless many of these research areas took a hit while all the money was spent launching BiDil . If the company has anything else ready for the clinic, I sure haven't heard about it, and the way that web page trumpets their IP rights isn't a good sign. If there were anything else to brag about, that wouldn't be the headline, would it?
Nitromed reminds me of the old story about the fellow who lost three cars playing poker and drawing to inside straights. He lost the first two by not filling his hand - and lost the third one by making the straight. Getting BiDil to the market may have been the company's biggest mistake.
Comments (7)
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1. PandaFan on March 22, 2006 9:32 AM writes...
According to the morning papers, NitroMed is discovering that consumers are rational -- if the copay for BiDil is more than the sum of the copays for the two generic components, patients switching to the two separate generics.
I wonder how many other combinations-of-(nearly)-off-patent drugs will suffer the same fate.
Permalink to Comment2. Barbara on March 23, 2006 9:37 AM writes...
this story really intrigues me - when do you call a patient black - how black do you have to be? 1/4 or 1/8 - more or is less enough??
Can you help me solve that puzzle?
Barbara
Permalink to Comment3. Derek Lowe on March 23, 2006 10:43 PM writes...
Yeah, that's a tough one. The particular sensitivity to this combination is much more prevalent in the black population, but there are surely other scattered groups and individuals who would be in the same category.
In the package insert, the company says that the drug is approved for "self-identified" black patients. That's probably about as safe a measure as any.
Permalink to Comment4. Barbara on March 24, 2006 6:43 AM writes...
that is a good one: self-identified black!
Gotta think about that one for a while...
My black Ex-Husband always used to say, that the term 'black' is a political one and ought to be used by any member of a visible minority, who feels discriminated because of that...but that is a very different discussion....interesting in this context though...
Thanks!
Barbara
Permalink to Comment5. TM on April 20, 2006 9:22 AM writes...
Being one of the scientists in research at NitroMed, their bigest downfall was trying to market and sell this product on their own. You don't build a sales and marketing team of 150 in relation to 50 other employees, and try to market a controversial drug. They should have waited to put it to market, and partnered with another drug or waited until the extended release package was ready to follow close behind the launch of the original BiDil.
Permalink to Comment6. michel on May 29, 2007 3:22 PM writes...
What everybody seems to ignore that Nitromed has something that not too manyknows about. Another EU firm Nicox has obtained FDA for Naproxinod, it is a serie of the most promissing drug in 21 century. There is no official agreement yet about the company which will produce this drug in USA or in in EU. Merck waits for it to replace VIOXX sales. Nitromed knows how to produce nitric oxides = this is I believe this company is an excellent partner to Nicox.
Nitromed said they will concentrate on adjusting BIDIL medicine to one pill a day which is opening up large manufacturing capacity to produce for Nicox for example.
It is said to observe that Americans are so obcessed by white & black people healthcare.
Permalink to CommentThe unique missfortune of Nitromed is the fact that their good medicine has been associated with black population when the medical base is very good for white people as well. This is another example how the color attibution made marketing mistake at Nitromed when their drug was launched.
I continue to believe in the bright outlook short and long term despite of all the comments you can read at this blog
7. Anonymous on March 24, 2009 1:10 PM writes...
Derek,
Who is managing the Nitromed transaction at Deerfield Management?
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