Cardiokine is fine after Biogen Idec dropped their deal

It can be disastrous for a small drug developer to have a deep-pocketed partner walk away from a partnership on an experimental therapy.

Such a loss of support often forces the small company to lay off staff, halt research, or even fold altogether.

As part of a major restructuring and shift in therapeutic focus, Biogen Idec Inc. last week severed its ties with Philadelphia’s Cardiokine Inc., with whom it had been collaborating on a drug called lixivaptan since mid-2007.

At the time their deal was struck, Cardiokine received an upfront payment of $50 million with the promise of up to $170 million in additional payments. In the end, Biogen Idec would pay out a total of only $95 million.

But a far-from-somber Amber Salzman, chief executive of Cardiokine, was smiling and counting her company’s good fortune as we talked in her office overlooking City Hall on Friday.

She had her reasons for being happy. In dissolving its partnership, Biogen Idec returned all rights to lixivaptan to Cardiokine.

The timing was good, too. Cardiokine is nearing completion of Phase III clinical trials on the treatment for hyponatremia, a condition often associated with heart failure. So the collaboration got the drug company through the crucial late-stage human-testing phase, “de-risking” the compound, as Salzman called it.

“They were a great partner, and the termination was a great outcome for us,” Salzman said.

In fact, Cardiokine hopes to present its first data from the studies at the American Society of Nephrology’s Renal Week 2010 meeting in Denver next week.

If the Phase III study results show lixivaptan to be effective, Cardiokine should be able to sign up another Big Pharma partner to help commercialize the drug. Currently, the company is on track to file a new drug application with the Food and Drug Administration in mid-2011, Salzman said.

Why would another pharmaceutical company step up after Biogen Idec bailed? Because it’s not easy to get a new drug approved, and Cardiokine is getting close with lixivaptan.

“In the next 18 to 24 months, you could be launching a drug,” said Len Selihar, Cardiokine’s vice president of alliance management and corporate development.

Both Salzman and Selihar have extensive backgrounds in Big Pharma. They and Cardiokine’s 20 employees know nothing is assured when it comes to drug development. But the FDA did approve a different hyponatremia drug in May 2009: Samsca, also known by the chemical name tolvaptan, made by Japan’s Otsuka Pharmaceutical Co. Ltd.

Hyponatremia often goes undiagnosed, especially in the elderly, Salzman said. It’s a common imbalance in the sodium-to-water ratio in the bloodstream. It can affect a person’s gait. Other symptoms include nausea and vomiting, headache and confusion.

But in the extreme, hyponatremia can be deadly. A woman who participated in a California radio station’s water-drinking contest in 2007 died after downing about six liters in three hours.

Marathoners are at risk of overhydrating and flushing out their bodies’ sodium. A study of runners who finished the 2002 Boston Marathon found 13 percent suffered from hyponatremia. Their blood samples showed serum sodium concentrations of 135 millimoles per liter or less. The normal range is 136 to 142 mmol/L.

A 2006 study estimated that between 3.2 million and 6.1 million people in the United States may suffer from the condition annually.

That market potential was not enough to prevent Biogen Idec from dissolving its partnership with a 6-year-old, venture-backed firm in Philadelphia.

Still, business deals can end in many different ways, and Salzman said she couldn’t be happier how Biogen Idec ended theirs.