Biotech Values

[DewDiligence]

Make-or-Break News Awaited on AGI-1067

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070105:MTFH39861_2...

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Fri Jan 5, 2007 8:42 AM ET
By Ben Hirschler

LONDON, Jan 5 (Reuters) - Make-or-break news on AstraZeneca Plc's <AZN> experimental heart drug AGI-1067 may come any day, marking a potential turning point for the stock, industry analysts believe.

Its partner AtheroGenics Inc <AGIX> hopes to present results from a pivotal Phase III clinical trial to the American College of Cardiology (ACC) meeting in New Orleans in March and analysts noted the deadline for research submissions was Jan. 4.

As a result, AtheroGenics may already be in discussions with the ACC about what headline results it and AstraZeneca can release to investors ahead of the medical meeting, making an imminent announcement possible.

Atherogenics CEO Russell Medford, meanwhile, is due to address J.P. Morgan's annual healthcare conference on Jan. 10.

An AstraZeneca spokesman declined to comment on the precise timing but said the news was still expected early in 2007.

AstraZeneca agreed in December 2005 to pay AtheroGenics up to $1 billion for exclusive rights to AGI-1067, an anti-inflammatory product for reducing atherosclerosis, or the build-up of plaque inside arteries that can lead to heart attack and stroke.

The drug, which could get to market in 2008, has gained heightened significance within AstraZeneca's depleted pipeline following the failure of stroke treatment NXY-059 in October.

But it is viewed by industry analysts as a risky project with a high chance of failure. Analysts believe AGI-1067 could potentially have peak sales of up to $5 billion a year, but lack of confidence that it will work means risk-adjusted sales forecasts are nearer $500 million to $1 billion. [This makes no sense, but that’s Wall Street!]

As a result, shares in AstraZeneca could swing widely on the results and the impact on biotech firm AtheroGenics is likely to be much greater.

House broker Deutsche Bank believes success for AGI-1067 could add more than 12 percent to AstraZeneca's long-term earnings per share.

But failure would further undermine confidence in the group's ability to bring new drugs to market. The group will have no other Phase III data until 2008.

AGI-1067 belongs to a small group of experimental medicines that aim to tackle the inflammation behind heart disease. GlaxoSmithKline Plc <GSK> and Iceland's Decode Genetics Inc <DCGN> also have similar rival products in development.

If successful, such medicines could be the next big thing in treating heart disease, since existing best treatments -- anti-cholesterol drugs -- only reduce the risk of disease progressing by 30 to 35 percent.
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