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Cardiome shares fall as Merck drops oral AF drug

FDA-ordered labelling revisions for Sanofi’s Multaq could have influenced decision on oral vernakalant

Merck & Co has decided to discontinue its involvement in the development of an oral formulation of vernakalant for atrial fibrillation partnered with Canada's Cardiome Pharma.

Shares in Cardiome plunged 54 per cent on the Nasdaq following the decision, which was based on Merck's "assessment of the regulatory environment and projected development timeline" for the programme.

Analysts have speculated that labelling revisions for Sanofi's rival anti-arrhythmic drug Multaq (dronedarone), ordered by the FDA because of safety concerns, may have led Merck to suspect that the regulatory bar for approval of oral vernakalant had been raised.

Merck entered into a licensing agreement with Cardiome for intravenous and oral formulations of vernakalant in 2009, providing $60m in upfront funding and promising up to $640m more in development, regulatory and commercial milestones.

The US pharma major is still partnering with Cardiome on the intravenous formulation, which is approved in the European Union, Iceland, and Norway as Brinavess for the rapid conversion of recent-onset atrial fibrillation to normal sinus rhythm.

Cardiome has been less successful bringing the intravenous formulation to market in the US, with the FDA holding off on approval despite a positive recommendation from an advisory committee in 2007 because of safety concerns.

Specifically, the agency has questions about cases of hypotension among patients taking the drug and concerns about its safety in patients with heart failure and other cardiovascular conditions.

Merck acquired US rights to the intravenous version from Astellas last year, saying at the time that "atrial fibrillation represents a large and growing unmet medical need".

Merck plans to launch the intravenous formulation in 30 more countries this year, according to Cardiome. Specific sales of the drug are unreported as they are not high enough to warrant being broken out in Merck's financial reporting.

Oral vernakalant is being evaluated as maintenance therapy for the long term prevention of atrial fibrillation recurrence, and Merck's decision is not wholly surprising given that the company had already announced to slow down the project in 2010.

"We are extremely disappointed with the decision Merck has made," said Doug Janzen, Cardiome's president and chief executive.

“It is our understanding that vernakalant oral has continued to have a safe and effective profile as demonstrated by studies conducted since the product was licensed to Merck," he added.

Cardiome said it would slash costs to around $11m a year - half its current level - as a result of Merck's decision. It is currently sitting on around $53m in cash reserves, and said it would be reviewing the impact of Merck's decision on its business strategy.

20th March 2012

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