After many setbacks, Acusphere
This morning, the small firm announced that it sealed a $70 million partnership for AI-700, its experimental ultrasound contrast agent, with privately held European pharmaceutical concern Nycomed. Shares of Acusphere soared 20% on news of the pact.
The revelation was welcome after several bumps in the road. The company first attempted to go public on Sept. 4, 2001, only to withdraw three months later due to deteriorating market conditions. Then, in late 2002, Elan
The Nycomed transaction shows Acusphere's resilience, although the company is far from easy street. AI-700 is in phase 3 testing for assessment of blood flow to the heart muscle. Unfortunately, privately held POINT Biomedical, backed by General Electric's
In addition, Acusphere has no marketed products, and in the first quarter it burned through almost $8 million, leaving it with $47 million in cash and equivalents. Nycomed will only add $12 million to its coffers before AI-700 receives approval, which means Acusphere may be running on or near empty by the time it files AI-700's new drug application with the Food and Drug Administration in the first half of 2006.
Finally, AI-850, the company's most promising candidate behind AI-700, only recently completed phase 1 trials. It seems unlikely that Acusphere will be able to advance AI-850, a unique formulation of the active ingredient behind Bristol-Myers Squibb's
Nevertheless, Acusphere has shown an uncanny ability to survive. After its first failed IPO attempt, it limped along by raising venture capital dollars in an incredibly difficult environment. If it can continue to find cash and develop more partnerships, it may yet thrive.
Fool contributor Brian Gorman is a freelance writer living in Chicago, Ill. He does not own shares of any companies mentioned here.