While reporting encouraging Phase IIb data on an oral formulation of sodium and potassium channel blocker vernakalant March 17, Cardiome Pharma also revealed it has retained Merrill Lynch merger and acquisition specialists to advise it on a possible sale of the company.

The Vancouver, B.C.-based pharma is waiting on a past-due decision from FDA on its NDA for Kynapid , its intravenous formulation of vernakalant for rapid conversion of acute atrial fibrillation to sinus rhythm. The IV formula had a PDUFA date of Jan. 19.

FDA recently has adopted a policy of allowing decisions to occur up to 60 days after a PDUFA date.

A positive decision on Kynapid has been anticipated since FDA's Cardiovascular and Renal Drugs Advisory Committee voted Dec. 11 that the NDA should be approved. The committee, however, also recommended a narrowly worded indication, to prevent adverse events due to symptomatic and/or decompensated heart failure, myocardial infarction or acute coronary syndrome (¹ Also see "Astellas/Cardiome’s Vernakalant Wins Advisory Committee Approval In 6-2 Vote" - Pink Sheet, 11 December, 2007.).

Cardiome President Doug Janzen said he believes a decision on Kynapid is near, speaking to investors March 17 to outline the oral formulation data and address Cardiome's business strategy.

"While the IV agent is not yet approved, as we all know, we believe we are close but the FDA hasn't given us specific timing," he said.

At least one market analyst predicts a positive outcome for Kynapid, despite the FDA delay in approval. Karl Keegan of Cannacord Adams, in a March 11 brief, said the drug "has a good chance of approval."

Meanwhile, Michael King of Rodman & Renshaw wrote on March 17 that FDA's delay might not mean trouble for the NDA. "If intravenous vernakalant is approved, we would expect the label to be quite restrictive," he said. "However, we believe an approval will serve to greatly enhance the market potential of oral vernakalant and value of a potential deal."

Several analysts wondered whether Cardiome has a hidden agenda in retaining Merrill Lynch, but Janzen said during the call that his only aim was to "maximize the current opportunity" for shareholders. Cardiome has been approached by potential partners interested in European rights to Kynapid, global rights to the oral formulation and other, more strategic types of relationships, he said.

Cardiome has partnered with Tokyo-based Astellas on Kynapid since 2003. In exchange for assuming 75 percent of the development costs of the IV formulation, Astellas obtained North American commercialization rights to the compound (² Also see "Astellas/Cardiome Anticipate Oct. 19 Vernakalant User Fee Date" - Pink Sheet, 19 December, 2006.).

Noting the company has spoken with more than 10 potential partners or purchasers since the second half of last year, Joseph Schwartz of Leerink Swann Research observed in a March 17 note that merger and acquisition interest in Cardiome is high, "suggesting that the company could be auctioned off this year."

News driving the stock price

Mark Schoenebaum of Bear Stearns wrote in a same-day note that his firm has never seen a pharmaceutical company announce positive data and the hiring of an investment bank on the same day. The confluence of these events, he said, could mean either that a deal is imminent or that something is amiss with the data Cardiome reported.

"At this point, our strong bias is that the former is the case," Schoenbaum wrote, suggesting Cardiome is trying to drive up its stock price and increase bidding.

Cardiome shares ended March 17 up 30.6 percent, at $8.15.

The 90-day Phase IIb data for oral vernakalant suggested both efficacy for the 500 mg dose and a strong safety profile for all doses, although the company warned the interim findings did not mean final results would be the same. CEO Bob Rieder called the data "very encouraging" and added that it would advance two goals - establishing a path to Phase III testing and increasing the company's attractiveness to potential partners.

"Both of our strategic objectives have been advanced with this dataset - that is, we now have information that helps us to at least understand that probably the 300 mg dose is not our final dose - we're looking at probably 500 mg - and that longer-term exposure to vernakalant in these dosing ranges does not seem to pose any safety issues," he said during the call.

Oral vernakalant is being investigated for maintenance of normal heart rhythm after termination of atrial fibrillation. A Kaplan-Meier analysis of the 446 patients showed median time to recurrence of AF was greater than 90 days for participants receiving the 500 mg dose, compared to 39 days for the placebo group.

Further, 52 percent of patients in the 500 mg dose group completed 90 days in normal heart rhythm compared to 39 percent in the placebo group. That difference is sufficient to demonstrate efficacy, Cardiome said. Interim efficacy analysis did not show statistical significance for 150 mg or 300 mg doses of oral vernakalant, however.

"Some may question the strength of a 13 percent absolute increase in efficacy versus placebo," Schoenebaum wrote. "However, we believe that only modest efficacy is needed in this setting - as long as safety remains clean."

Interim Phase IIb data show the drug was well tolerated, and potentially drug-related adverse events occurred in just 2 percent of 150 mg recipients, zero 300 mg recipients and 1 percent of 500 mg recipients. The placebo group also had a 1 percent rate of adverse events.

As important, there were no drug-related cases of Torsades de Pointes, a potentially fatal arrhythmia that occurs as an occasional side effect of some current anti-arrhythmia drugs, Cardiome said. Final results from the 735-patient, double-blind, randomized study are expected during the third quarter.

-Joseph Haas (j.haas@elsevier.com)

Cardiome Reports Positive Oral Vernakalant Data; Says Company Sale Is Possible

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