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Investors flock to IMI after deal struck
Skin cholesterol test to be used in study
By LEONARD ZEHR
00:00 EDT Friday, August 29, 2003
Investors jumped into IMI International Medical Innovations Inc. yesterday after the medical devices maker signed a collaborative research pact to supply its flagship skin cholesterol test for a major late-stage clinical study of an anti-inflammatory pill to target hardening of the arteries.
The stock closed up 14 cents at $3.25 on the Toronto Stock Exchange as volume climbed to 75,200 shares, almost four times the daily average.
Under the accord, Toronto-based IMI will supply its Cholesterol 1,2,3 test to AtheroGenics Inc., which is undertaking a $40-million (U.S.) Phase III trial to test 4,000 patients at 180 cardiac clinics in North America, Britain and South Africa with its AGI-1067 drug. In return, it will have full access to the trial data.
"The use of Cholesterol 1,2,3 in this large clinical trial will serve to raise the product's visibility with opinion leaders at some of the leading cardiac centres throughout the world," said Loewen Ondaatje McCutcheon Ltd. analyst Mark Knapp.
He rates the stock a "speculative buy," with a 12-month target price of $6 (Canadian).
Another analyst, who asked not to be identified, said the agreement with AtheroGenics will not affect IMI's bottom line and valuation. "But it will give the skin test wider recognition with cardiologists and could validate the relationship between skin cholesterol readings and cardiac events."
IMI president and chief executive officer Dr. Brent Norton said the study will provide some of the most important data ever collected on skin cholesterol testing. "Joining the . . . study is consistent with our strategy of leveraging large trials led by other corporate and government organizations," he added.
Rob Scott, chief medical officer of Alpharetta, Ga.-based AtheroGenics, said skin cholesterol appears to correlate with cholesterol levels in other tissue, such as the artery wall.
"This in turn may correlate with the progression of coronary artery disease and associated clinical events such as heart attack or death, as well as the effect of AGI-1067 on atherosclerosis," he said.
IMI's 1,2,3 skin test has already been cleared for sale, with an expected launch through Johnson & Johnson's McNeil Consumer Healthcare unit in the fourth quarter, Paradigm Capital Inc. analyst David Ng said in a recent report.
Various delays in the launch have "caused uncertainty and has resulted in a depressed stock price over the last 12 months," he said.
Still, he rates the stock a "buy," with a 12-month target price of $8.
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