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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Biomaven who wrote (7814)	1/28/2003 10:54:13 AM
From: Biomaven	Respond to of 52153

Here's a reasonable Forbes article on ALT: Pharmaceuticals Is Alteon Biotech's Next Turnaround Story? Matthew Herper, 01.27.03, 7:00 AM ET NEW YORK - Alteon, a tiny drugmaker based in Ramsey, N.J., has a new way to treat high blood pressure by reversing the consequences of aging on the heart and arteries. Unfortunately, Alteon's down to only a year's worth of cash--not nearly enough to fund the drug's development. Alteon needs an infusion of funding from a big pharmaceutical company, fast. The kind of data that could close a deal with a drug giant could be on the way. Last Tuesday, Alteon (amex: ALT - news - people ) released a study showing that its drug, ALT-711, helped patients suffering from heart failure--meaning that their hearts were no longer efficiently pumping blood, leading to exhaustion and, eventually, death. Patients were so happy with the treatment that they asked to be put back on it after the trial ended. Since those results were posted, Alteon shares have risen 47% to $3.10. But the real tests of the drug's potential are still to come. Alteon says the results of clinical trials testing ALT-711 in 450 patients with high blood pressure will be available in the first half of this year. Data on another 180 patients with a thickening of the heart's left ventricle will be available at the same time. The world's biggest pharmaceutical players will be watching: Merck (nyse: MRK - news - people ), Pfizer (nyse: PFE - news - people ) and Novartis (nyse: NVS - news - people ) all count anti-hypertensive drugs among their top sellers. "If this drug shows the potential to be very safe and highly effective, then we'll need a worldwide partner to develop this efficiently," says Alteon Chief Executive Kenneth Moch. "We have already started conversations with most of the leading players. We believe this has the potential to be a multibillion-dollar drug." ALT-711 is based on a radical idea. Other hypertension drugs work by relaxing the muscles that tighten blood vessels, or by thinning the blood. But scientists at Alteon targeted another mechanism: the stiffening of veins, arteries and even the heart's wall. This happens because collagen molecules in the tissue become interlinked, making the entire circulatory system a bit like aged rubber. "The initial focus has been related to blood pressure because high blood pressure is a well-defined disease," says Edward Lakatta, a researcher at the National Institute on Aging in Baltimore who is participating in Alteon's clinical trials. "But it's become quite clear in the last couple years that blood-vessel stiffness itself is a risk for heart attacks and stroke." Doctors working with ALT-711 are excited because it appears to reverse some of this stiffening effect, allowing the heart to fill and making the blood vessels more pliable. The result is lowered systolic high blood pressure--the top number a doctor reads off of a sphygmomanometer. "Unlike all the other drugs, [ALT-711] is actually working by affecting the tissues," says George Bakris, a nephrologist at the Rush University Hypertension Center at the Rush Presbyterian-St. Luke's Medical Center who is participating in some of Alteon's trials. "I don't want to call it a rejuvenation, but it's kind of a renaissance for the blood vessel. It's slowing down the aging processes." Alteon's potential has also caught the eye of several sell-side analysts, including Mark Monane at Needham & Co. and Jason Kantor at W.R. Hambrecht & Co., who have initiated coverage with "buy" ratings. The argument for the stock: ALT-711 has huge potential, and shares are still cheap. It also would represent a turnaround for Alteon, which is best known for the clinical flameout of a diabetes drug in 1998. Moch, who had served as chief financial officer, took over as CEO following that failure. "People are thinking of the old Alteon," says Needham's Monane. "This ain't your mother's Alteon. This is a different molecule, a trial design and development path that is mature and sophisticated, and they beefed up their management team." However, for all of ALT-711's promise, a lot could still go wrong. Many drugs fail in late-stage clinical trials. And for Alteon, everything is riding on this medicine. The company has only $18 million in cash, enough to last a year at its current burn rate. If ALT-711 fails, it will be difficult to get more money, either from a pharmaceutical company or from the public markets. Peter