Development-stage drugmakers rarely ever close up shop following a failed drug program, so as long as they have cash in the bank to fund some sort of clinical trial development. This is the case with AtheroGenics
AtheroGenics and partner AstraZeneca
In conjunction with its second-quarter earnings release yesterday, AtheroGenics announced more details on its path forward for AGI-1067. Based on the previous phase 3 diabetes subgroup results, it will be running a 1,200-person phase 3 study of the drug in patients with type 2 diabetes. Interim results from this study are expected in the first half of next year with final study data in the second half of the year.
With its $115 million in cash and investments on hand, AtheroGenics expects it will have enough cash to get through all of 2008 without the need for another cash infusion after it rolled some of its debt that was coming due out to 2011.
AtheroGenics' decision to immediately rush into a large and more expensive clinical trial without even an interim study in between is curious. The drugmaker is trading at a low $70 million valuation, but investors who buy into shares today shouldn't get their hopes up for the outcome of the diabetes study until AtheroGenics publishes more evidence corroborating AGI-1067's efficacy and safety (especially in combination with other anti-diabetic compounds) in treating the disease.
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