In another reminder of the volatility inherent to biotech investing, Adolor's
In a classic example of the cure sometimes being worse than the disease, one of the major causes of post-operative ileus is pain-killing opioid drugs like morphine. Opioid drugs are the world's best pain killers, but they have boatloads of side effects, not the least of which is their paralyzing effects on a patient's gut.
However, this finding leads itself to an obvious solution -- block the action of opioids in the gut, while maintaining their pain-killing properties in the brain. And that was precisely what Entereg from Adolor was meant to do. Despite promising Phase II tests, the Phase III results just did not achieve statistical significance. Even more troubling was the finding that both the low and high dose produced similar results. It is more difficult to salvage a clinical trial when the researchers don't even know what dose to use!
While the news is bad for Adolor and its partner, GlaxoSmithKline
As is often the case, what's bad news for one company is good news for its competition, and Adolor is no exception. Its competitors include Pain Therapeutics
Progenics trades at about $266 million in enterprise value, while Adolor trades around $340 million in EV. While Adolor still has Entereg in trials for other indications and the company still might rescue it for post-operative ileus, I would rather own Progenics and their pipeline, which also has investigational new drugs for HIV and prostate cancer.
Update:Last week, in discussing Vicuron's
David Nierengarten, Ph.D., works with a biotechnology venture capital fund. He often contributes to Fool.com and is an active member of the TMF community as DavidMN. He owns shares of GlaxoSmithKline, Pain Therapeutics, Vicuron, and Progenics. He appreciates your comments at firstname.lastname@example.org and on the Biotechnology discussion board.