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March 21, 2006
Nitromed's Slow Decline
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.
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