Remember all those times on ER when someone yells "Clear!" and shocks a patient with a pair of paddles? That's called electrical cardioversion, and it's an extreme way of returning the heart to a normal rhythm. It's effective, but it also causes every muscle in the body to simultaneously contract. Not pleasant.

Well, for less acute cases of atrial fibrillation -- an abnormal rhythm of the upper chambers of the heart -- Canadian biotech Cardiome Pharmaceuticals (NASDAQ:CRME) has been working with Astellas to develop a drug called vernakalant. If Cardiome gets a favorable decision from the FDA on the drug, the stock could take a big jump. It could also be a big step forward for the treatment of atrial fibrillation. There are currently many drugs to treat the condition, but most of them suffer from a serious potential for toxicity.

The development process for vernakalant hasn't been perfect. In May 2006, Cardiome took a hit when the New Drug Application (NDA) filing for the intravenous form of the drug was rejected as incomplete. But the rejection was a result of sloppy paperwork, not a bad drug. And it's a lot easier to just fix bad paperwork.

Indeed, indications suggest that vernakalant is a good drug. A double-blind, placebo-controlled clinical study, the results of which were published in the Journal of the American College of Cardiology in 2004, showed that atrial fibrillation stopped much more quickly in patients on vernakalant than those receiving a placebo. The number of patients who returned to a normal rhythm after 30 minutes was also substantially higher. And the placebo group suffered more serious adverse events than the treatment group. These results were statistically significant.

In a June 4 press release, Cardiome announced that phase 3 results for the IV formulation were also good in patients who developed atrial fibrillation one to seven days following bypass or valve-replacement surgery. (A full 30% of these patients experience atrial arrhythmia following surgery.) Just as in the 2004 study, patients given a placebo experienced more adverse events than those who were given the drug.

Results of a phase 2a study of an orally available form of vernakalant, however, have provided mixed results. At the lower dosage of 300 mg, 33 of 54 patients returned to a normal rhythm, compared with 24 of 56 on a placebo. Results of dosing at 600 mg were not statistically significant. But it's worth noting that the results of the 300 mg test slid just within the accepted value of statistical significance, while the phase 3 results of the IV formulation, which involved a larger patient group, achieved strong statistical significance. A phase 2b study of the oral form was initiated in the first quarter of 2007, and those results will likely be available late this year or early next year.

Like many diseases, the likelihood of atrial fibrillation increases with age. And with the first baby boomers having just turned 61, there's likely to be a greater demand for drugs to treat the condition for the next two decades. That makes vernakalant even more valuable. While the oral version of the drug is significant, the IV form will be the main value driver for now. Cardiome resubmitted its NDA for the drug and have should hear back from the FDA by Oct. 18.

I think vernakalant is likely to get approved. As with any investment based on FDA approval, of course, there is substantial risk involved. Cardiome's stock has meandered over the past year from $14 per share to as low as $8, and right now it still hangs below $10. If the company gets a win on vernakalant, all is well. On the other hand, its balance sheet, like those of most biotechs with no sales, is not so robust. An unfavorable decision from the FDA, and the stock could take a substantial dive.

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Fool contributor Andrew R. Vaino, M.B.A., Ph.D., once won 600 of Ben Stein's dollars on Win Ben Stein's Money and has a long position in Cardiome. He also writes on biotech stocks at The Fool has a disclosure policy.