Well the shorts had fired one last unavailing desperate shot in the WSJ ahead of the definitive news today:
AHEAD OF THE TAPE
By JESSE EISINGER
Have a Heart?
The murky world of biotech investing is tricky -- for investors and companies.
Investors got excited on Friday, on news that Johnson & Johnson might take over money-losing Scios , which sells a new drug for heart failure, called Natrecor. Scios shares rallied 22% on Friday.
The deal could very well go through; Scios confirmed it's in various talks. But Big Pharma makes mistakes, too, as we all learned when Bristol-Myers struck its wrong-headed deal with ImClone Systems.
Many investors have shorted Scios , citing lingering questions about Natrecor's growth prospects, cost effectiveness and safety. Scios maintains the drug is safe and effective and the FDA has approved it. It is being used by thousands of patients. Analysts expect it might have peak sales of half a billion dollars a year.
But investors should ask: Why would Scios want to sell now?
A small study, to be presented at the American College of Cardiology meeting next month, will raise a question about Natrecor's safety. Conducted by doctors at St. Luke's-Roosevelt Hospital in New York, it is titled, using the scientific name for Natrecor, "Is There Risk Associated With the Use of Nesiritide for Acute Heart Failure?"
It appears Natrecor-treated patients are at higher risk of death within 30 days of administration compared with patients given other treatments, according to the analysis culled from existing data. The details aren't yet public.
A Scios spokeswoman said the company hasn't seen the analysis. But she said that the physician who conducted the study "was not involved in Natrecor trials. Therefore, he has not had any access to raw data to do his meta-analysis, so analysis is likely to be flawed." Johnson & Johnson declined to comment.
The Cleveland Clinic's James Young, who ran clinical trials for Natrecor, has discussed the study with the authors and dismisses it as minor and wrong. He contends the market is misinterpreting it. "There is absolutely no credible evidence to suggest Nesiritide increases mortality in a statistically significant fashion in any database that has been put together appropriately," he says.
This all may be true. But safety aside, some doctors aren't impressed with how well Natrecor works. "The very modest benefit doesn't warrant the cost. The average patient probably doesn't even notice the benefit of this drug," says JoAnn Lindenfeld, a cardiologist from the University of Colorado in Denver.
Old hands have seen biotech companies sold, only to wind up breaking the purchaser's heart.
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Updated February 10, 2003 |
