Acusphere Passes Latest Stress Test, But is Time Running Out?
It was finally good news for Watertown-based Acusphere (NASDAQ: ACUS) this week, as the company reported positive clinical trial results for its lead product, called Imagify, at the American Heart Association (AHA) annual meeting.
But the burning question is whether that news comes in time. Acusphere is 14 years old and running out of cash. And the company suffered a series of minor setbacks over the past year which, taken together, have cast doubts over whether it can actually get its first product to market.
Imagify, Acusphere’s management argues, is potentially a breakthrough product targeting a $2 billion market. If approved, it would be the first contrast agent that can be used with ultrasound to see how blood flows through the heart. Currently, doctors use nuclear stress testing to get this crucial information, and that involves radioactive tracers tracked via special cameras. In Acusphere’s test, which the company calls an “Imagify stress echo,” the camera would be replaced with an ultrasound machine, and the radioactive tracer would be replaced with an injectable suspension of gas-filled polymer microspheres.
About 10 million nuclear stress tests are done each year to look for narrowing of the vessels in the heart. The Phase 3 trial results just released at AHA show that in a head-to-head comparison, Acusphere’s test was just as accurate as the nuclear one. Those studies involved several hundred patients and 28 medical centers. Since using Imagify has other advantages, that data could be enough to help it unseat the nuclear test.
Compared to the nuclear stress test, “[Imagify stress echo] will be cheaper, does not involve radiation, and is quicker,” says Roxy Senior, Director of Echocardiology at Northwick Park Hospital and the Imperial College of Medicine, in London. “Frankly, I can’t see any disadvantages to using it,” he says. “With ultrasound, not only do you get the data in real time, but now you can also assess perfusion and heart function with one test.”
But Acusphere seems to be beset with minor problems. Over the last few weeks, the company has been scrambling to get the word out that Imagify is not like some other microsphere-based ultrasound agents just slapped with a safety warning after several patients reportedly died while, or after, receiving them. Acusphere’s management issued a release explaining that no deaths have been seen to date in trials of Imagify, and that their product is “structurally different from commercially available ultrasound contrast agents; it has a different encapsulation material and a different gas.”
The company’s CFO also left in June, and was just replaced. Meanwhile, the firm needs to get its manufacturing facilities in order so that it can file with the FDA for approval of Imagify. All that is taking longer than anticipated, and that filing has already been pushed back once—from late 2007 to early 2008. And then there’s the money question. In its Q2 financial statement in August, Acusphere reported having roughly $83 million in assets, about $52 million of that as cash. (Third-quarter financials are to be released tomorrow.) But company CEO Sherri Oberg told the Boston Business Journal last month the money will only get it to the middle of next year. Delays are particularly costly now, and in September management announced it was putting plans for new products on hold while it focused on finding a partner to market Imagify.
Without that partner, it’s not clear how the product could be launched.
It’s a classic quandary for a young drug company. “We don’t have a sales force, because we don’t have a product yet,” says Mona Haynes, Acusphere’s vice president of marketing and sales. Meanwhile, the money is flowing out rather than in. “It is important that we get a partner so we can continue raising funding,” she says. “Introducing a product is expensive.”
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