AtheroGenics to study failed heart drug for diabetes

NEW YORK, June 1 (Reuters) AtheroGenics Inc. said it would test its failed experimental heart drug for diabetes after analyzing promising blood sugar control data from a large study.

Patient enrollment for the new late-stage trial of the drug, AGI-1067, is expected to begin in the third quarter, with interim results expected in mid-2008, AtheroGenics said, yesterday.

The tiny biotechnology company, which recently slashed its work force by half, said it has the resources it needs in both cash and personnel to carry out the planned six-month, 1,200-patient diabetes trial. But Chief Executive Russell Medford said in a telephone interview the company plans to begin looking for a partner on the drug later this year.

AstraZeneca Plc opted out of a partnership deal on AGI-1067 after the drug missed its composite primary goal of reducing cardiac death, heart attack, stroke, need for revascularization procedures and unstable angina by 20 per cent in data unveiled in March.

The anti-oxidant, anti-inflammatory drug, however, reduced the risk of developing diabetes by 64 per cent and demonstrated a reduction in blood sugar. The 6,144-patient ARISE trial that was testing the drug as an atherosclerosis treatment included about 2,000 diabetics.

''We had engineered into ARISE a way of looking at diabetics and the results were quite encouraging,'' Medford said.

Though the drug did not meet its primary goal in ARISE, it still cut incidents of death, heart attack and stroke.

And among diabetics there was a strong trend toward heart benefit with a 22 per cent reduction in cardiac death, resuscitated cardiac arrest, heart attack and stroke -- results that just missed statistical significance, the company said.

Given recent heightened concerns about potentially elevated heart risks with GlaxoSmithKline's widely-used diabetes drug, Avandia, and fears those risks might include other medicines from that class, a new diabetes treatment with heart protective qualities could prove to be an important treatment option should that pan out in further testing.

''There's clearly a need for a therapeutic that is able to confer glycemic control and hopefully has no cardiovascular risk and optimally would have a benefit in terms of cardiovascular risk reduction,'' Medford said.

''This is a logical and attractive place to move forward both from a scientific and clinical need standpoint. We're looking forward to confirming these observations from ARISE,'' he added.

Medford believes data from the ARISE trial could be used as part of its eventual submission to health regulators seeking approval for AGI-1067 use in Type 2 diabetes.

The new trial, called ANDES, will measure blood sugar control in Type 2 diabetics. If approved, the drug would be a new class of diabetes treatment.

While the company has shifted its focus to diabetes, Medford was not yet ready to declare AGI-1067 dead as a potential heart medicine.

''We clearly have a drug that shows cardiovascular benefits and we're not excluding any of our options as we move forward and learn more about the drug in clinical trials,'' he said. ''The question is when rather than whether.'' The company, which now has a staff of just 67 employees, forecast a net loss of 70 cents to 85 cents per share for the remainder of 2007.

AtheroGenics shares were little changed at 2.42 dollar on Nasdaq, off nearly 90 per cent from an intraday high of 20.03 dollar in mid-February, when optimism over the drug's potential in treating atherosclerosis was running high.

REUTERS SS PM0915