Biotech, Drugs, deals

NitroMed Sells Off Its Only Product, a Controversial Heart Pill for African Americans

Rebecca Zacks 10/23/08

Nine months after slashing its staff and discontinuing marketing of its only marketed product—a heart-failure drug approved specifically for African Americans—Lexington, MA-based NitroMed (NASDAQ: NTMD) is selling all the assets related to the pill. Under the terms of the agreement, JHP Pharmaceuticals, a privately held specialty healthcare company in Parsippany, NJ, will pay $24.5 million in cash for the drug, a combination of the generics isosorbide dinitrate and hydralazine hydrochloride marketed as BiDil, plus as much as $1.8 million for existing inventory.

The deal, expected to close early next year, must be approved by a majority of NitroMed’s stockholders. HealthCare Ventures, Rho Ventures, and Invus Public Equities, which together control about 28 percent the Lexington firms common stock, have already pledged to back the deal.

After this deal’s done, NitroMed intends to concentrate on “seeking to maximize shareholder value by combining, through one or more strategic transactions, with companies that have significant unrealized value or growth potential,” CEO Kenneth M. Bate said in a statement; divestiture of some or all of its business is another option the company might pursue. But if neither alternative pans out, NitroMed will be forced to shutter its operations entirely.