A June 17 Business article incorrectly said that Advancis Pharmaceutical Corp. received results of recent tests on an antibiotic on June 14. The results were received June 15. (Published 6/21/05)
Six years ago, after ditching a senior drug company job and the $3.5 million in stock options that went with it, Edward M. Rudnic sat down at a friend's dining room table and together they sketched out the beginnings of a dream: to capture a lucrative piece of the pharmaceutical market by developing antibiotics that had to be taken only once a day, instead of the usual four.
Around $50 million in research later, after reams of studies and a number of promising initial trials, Rudnic was in the office of his Germantown company, Advancis Pharmaceutical Corp., awaiting word Tuesday on whether a final round of human testing was successful. His chief scientific officer, Barry Hafkin, walked in with the research team.
Rudnic recalled that Hafkin stumbled over his words for a good 30 seconds.
"It's bad news," he said finally. "We didn't make it." Rudnic's stomach sank.
"It is a feeling that you don't ever want to experience again," he said. "It's really just a gut-wrenching kind of feeling that immediately takes hold."
The news shook Maryland's tightknit biotech community, serving as a blunt reminder that drugs don't always do what their developers think or hope they will do, and underscoring the fragility of life-science companies that often stake their futures, and millions of investors' dollars, on one great idea. The particularly cruel nature of drug development is that an idea can blow up even after it seems to work in the test tube, then in animals, then even in small populations of some humans.
In this case, the idea was that a technology called Pulsys would make antibiotics such as amoxicillin attack bacteria in time-released, staccato bursts. It's an idea any consumer would cheer, particularly parents freed from dosing their children's sore throats every six hours.
"From a public health point of view, a product like this is very attractive," said James H. Cavanaugh, the managing partner of HealthCare Ventures LLC, a venture capital company that put up $11 million to launch Advancis and has since invested $37 million more.
That the technology had failed in the most recent study was especially disturbing for the region's biotech cluster because Rudnic is one of its chief cheerleaders. His company often sponsors networking events. He is influential within several life sciences organizations. Yesterday, his phone didn't stop ringing. Wayne T. Hockmeyer, the founder of MedImmune Inc., called. So did John Holaday, the founder of EntreMed Inc. So did about 50 other people from the community.
"The message from everyone is that you had an idea and the idea was good," Rudnic said. "The team is good. Your people are smart. Hang in there."
And that's exactly what Rudnic said he plans to do, even though the company only has enough money to operate through 2006, and even as investor confidence plummeted yesterday. Shares of the firm fell nearly 60 percent, to $2.03.
"This is in no way the end of the company," which employs about 80 people, Rudnic said. "We have all the tools to make this thing successful. I know people have had their confidence shaken, but mine is not."
For starters, Advancis is a month away from receiving results from tests in children, a potentially larger market than for adults because strep infections among children are more common, and it's harder to ensure they take their medicine several times a day.
Rudnic and Hafkin also want to more closely examine data from the most recent study, which included adults and adolescents, to see what went wrong and whether it can be fixed.
The hope was to show that once-a-day dosing was at least 85 percent effective at curing strep throat, the medical standard for primary treatment. Advancis also had to prove its drug was not inferior to standard, four-times-a-day dosing of penicillin, which has been used since the 1940s.
Advancis fell short on both counts. It was only 76 percent effective. Penicillin worked better.
"We were close but not equivalent," Hafkin told investors during a morning conference call. "There are a lot of important questions to answer before I can tell you what went wrong."
The possible problems the company will investigate include whether each dose of the medication was manufactured correctly, how people reacted to the drug based on whether they had eaten or not, and whether there were differences on how the drug was administered to around 200 subjects at various testing sites.
"We really need to tear this apart to see if we can find a good reason why this happened," Rudnic said.
If Advancis can't, and the pediatric trial is also unsuccessful, Rudnic said the firm would have to reevaluate the entire focus of the company and perhaps switch course. That scenario was made more ominous yesterday after a spokesman for Par Pharmaceutical Inc. which has poured $23.5 million into the amoxicillin product, said the company might pull out from a partnership deal with Advancis if both trials proved negative.
In October, Advancis disclosed that GlaxoSmithKline pulled out of a partnership deal with Advancis on another antibiotic, Augmentin, citing financial reasons. Advancis shares plunged 62 percent at the time. The firm laid off 19 people a month later.
Despite the stream of bad news, several callers reminded Rudnic yesterday about the history of MedImmune, the region's most successful biotech company. In 1993, federal regulators declined to approve RespiGam, a prevention for a respiratory virus in infants. The company continued working on the drug and got it approved in 1995. Two years later, the company won approval for a newer version, Synagis, which now generates $1 billion a year in revenue.
"If we are half of successful as MedImmune, I'd be thrilled," Rudnic said.
But he also knows his company now has a tough, hard slog ahead.
One of the calls Rudnic received was from his friend, James D. Isbister, the co-founder of Advancis and owner of the dining room table on which they sketched their initial plan. Isbister asked him if he'd like to come over for a glass or two of scotch. They could sit at the same table.
"Absolutely," Rudnic said.