In the drug development world, no partnership is "until death do us part." Yesterday, specialty drugmaker AtheroGenics
AstraZeneca decided to break up with AGIX and stop funding any future pre-commercialization development of AGI-1067 after negative clinical trial results from a pivotal phase 3 study were announced back in March.
Just in 2005 and 2006 alone, AtheroGenics spent over $150 million in research and development expenditures. Although AstraZeneca was not directly supporting clinical trials of AGI-1067, it would have been responsible for marketing and sales expenses had the drug made it through the FDA.
The loss of AstraZeneca does not bode well for AGI-1067's approvability, considering that continuing the small back-ended deal would be of minimal cost to a huge pharma like AstraZeneca. It's always possible that AGI-1067 is not dead in the water and could still potentially make it to market.
AtheroGenics is pinning its hopes on subgroup analyses from the AGI-1067 phase 3 trial that showed the drug candidate might be effective for certain patient populations. The problem with this is that the evidence of AGI-1067's effects is still very inconclusive (at best) even after the large phase 3 study. Waiting around for years on more clinical trial results for a drug with such unproven efficacy is not something that is a recipe for success with specialty pharma stock investing.
Looking for more Foolish drug stock coverage? Check out the Fool's market-beating Rule Breakers newsletter. You can check out all our recommendations as well as get access to our message boards and exclusive content with a 30-day free trial.
Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.
