A Heads-Up on TorreyPines

After the closing bell Monday, TorreyPines Therapeutics (NASDAQ:TPTX) announced first-quarter results that included revenue of $2.5 million and a net loss of $3.3 million, compared with $2.5 million in revenue and a net loss of $3.8 million a year ago. Cash and cash equivalents stood at $52.5 million -- more than two times the company's estimated net cash burn of $23 million to $25 million for 2007. The stock closed about 10% lower than it was in mid-April, when it was listed as an out-of-favor stock for contrarian investors to consider.

During the first quarter, the company initiated phase 1 clinical trials using a range of dosages for two drug candidates, with results expected in the second half of this year. NGX426 is an oral formulation of tezampanel for migraines, and NGX267 is for schizophrenia. TorreyPines also extended its small molecule Alzheimer's drug discovery collaboration with Japanese pharmaceutical company Eisai for another year, continuing a long-term relationship with the marketer of the Alzheimer's drug Aricept.

Tezampanel is the company's lead drug candidate for migraine headaches, and it has demonstrated promising results thus far in five Phase 2a trials using intravenous (IV) administration. Because using this method isn't a commercially viable option for the chronic treatment of migraines, TorreyPines initiated a placebo-controlled phase 2b trial last October that evaluates tezampanel injected subcutaneously (SC) in 300 patients who suffer a single acute migraine attack. Results are expected in the second half of this year, and the company hopes to use them to design a phase 3 trial.

Tezampanel offers a unique potential treatment of migraines by blocking the transmission of pain signals in the brain, rather than causing blood vessels to constrict, as with the widely used migraine drugs known as triptans -- which include GlaxoSmithKline's (NYSE:GSK) Imitrex. In a small Phase 2a trial comparing it with SC-injected Imitrex, tezampanel was found to be both better tolerated and equally effective at relieving the pain and associated migraine symptoms. So TorreyPines decided to advance tezampanel into a larger Phase 2b trial and continue developing an oral formulation.

It's still in the early stages, but this story is a promising one. Patient biotech investors should keep an eye on TorreyPines, especially during the second half of this year, when results are expected in all three trials.

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Fool contributor Mike Havrilla, R.Ph., B.S., Pharm.D., is a Rite Aid pharmacist who lives, writes, works, and enjoys running on the streets and trails in the small Pennsylvania town of Portage. He invites your comments and feedback. Mike does not have a position in any company mentioned in this article. GlaxoSmithKline is an Income Investor recommendation. The Fool has a disclosure policy.