Medicure article
I believe the goal of the company would be to have a late breaker at ACC next year
Winning over hearts
Erin Pooley
From the March 26, 2007 issue of Canadian Business magazine
In the global cardiovascular drug industry, Medicure Inc. is a David among the Goliaths. With just 90 employees and a market capitalization of less than $140 million, the Winnipeg-based drug-discovery company is a small player compared to the pharmaceutical giants that compete in the US$70-billion heart-disease space. But despite its size, Medicure is working on a drug with the capacity to reduce the risk of heart damage due to cardiovascular disease — the No. 1 killer in both Canada and the United States. Recent safety concerns regarding drug-coated stents — an alternative treatment to coronary artery bypass surgery — could also pump some new life into this biotech's sagging share price (TSX: MPH).
Currently in pivotal Phase 3 trials, Medicure's MC-1 drug is a cardio-protectant, designed to reduce the damage to the heart when arteries are blocked and when they are subsequently reopened after bypass surgery. In a previous trial involving 900 bypass patients, the drug reduced the heart attack rate by nearly 50% in the first 30 days. If Phase 3 trials are successful — results are expected in March 2008 — MC-1 could be on the market in the U.S. as early as the beginning of 2009, following shortly after in Canada. (Medicure has already received fast-track approval from the U.S. Food and Drug Administration for MC-1.)
"I call it the second Aspirin," says Claude Camiré, a biotechnology analyst at Toronto-based Paradigm Capital Inc. "A lot of people use Aspirin or blood thinners [after surgery], but those only help your blood flow — they don't really protect your heart like MC-1. I think Medicure has a good chance of succeeding." Camiré rates MPH a Buy, with a 12-month price target of $3.
Shares in Medicure reached as high as $2.24 a year ago but now trade at around $1.20, despite speculation late last year they might pop, pending the announcement of a marketing partnership with a U.S. firm. Although nothing materialized, that option is still on the table, says co-founder, president and chief executive Bert Friesen (left). "We have stated that we are certainly open and interested, but only if it maximizes the value to the shareholders," he says. "If a partnership deal of significant value is presented to us before the data, we could still entertain it, but we're keeping the options open."
Camiré says Medicure could also be considered a target for acquisition, with Connecticut-based biotech firm Alexion Pharmaceuticals Inc. a possible buyer. "The recent failure of Alexion's similar type of drug in Phase 3 for the same indication as MC-1 could give an extra edge for Medicure," he says. "It may be looking to buy."
In the meantime, Medicure will continue to capitalize on safety concerns regarding drug-eluting stents — tiny, drug-coated tubes made of metal mesh that are implanted in the coronary artery after angioplasty to keep arteries open longer. Considered less invasive than bypass surgery — which involves grafting part of a healthy blood vessel onto a blocked coronary artery — drug-coated stents soared in popularity when they were approved by Health Canada in late 2002 and by the U.S. FDA in 2003. Vancouver-based device maker Angiotech Pharmaceuticals Inc. (TSX: ANP; Nasdaq: ANPI) — which was in partnership with Massachusetts-based Boston Scientific Corp. — saw its shares climb as high as $38 three years ago with the introduction of its drug-coated Taxus stent to North America. Recent news of the increased risk of blood clots in stent patients, however, has put Angiotech's stock on life support — it now flutters around $7 on the Toronto market. "Angiotech has seen a dramatic reduction in royalty revenue, which has caused a significant ripple effect through the company's financial situation," writes UBS analyst Jeff Elliott in a recent research report.
While Friesen is careful to point out that drug-eluting stents are not going away — and that the risk of blood clots is still relatively low — he remains hopeful the news will mean an uptick in the number of bypass surgeries performed each year in North America and, consequently, the amount of MC-1 prescribed as a post-surgery treatment. His five-year vision for Medicure is to become an integrated Canadian pharmaceutical company with "up to three products on the market [and] other ones in the pipeline — all focused in the cardiovascular space."
Medicure currently has the exclusive U.S. licensing rights to Aggrastat — a blood thinner — and has concluded Phase 2 trials on MC-4232, a combination drug intended to reduce high blood pressure in diabetic patients. With $45 million of cash on hand and a reported $1.4 million in second-quarter sales for the period ending Nov. 30 — compared to no revenue a year earlier — the company's goal is to ramp up Aggrastat sales, which could reach as high as $70 million by 2010, according to Camiré. Like all biotechs, Medicure does not come without risks, although analysts say the company is in a good position to finance MC-1's third — and final — trial, and there appear to be no competing drug candidates.
In the meantime, the company will have to work hard to muscle its way into the highly competitive — and fast-growing — field of cardiovascular drug development, where billion-dollar pharmaceutical companies easily outnumber the Medicures of this world. A battle of biblical proportions, indeed.
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