Tuesday, June 24, 2008

Replidyne: Fare The Well Faropenem…

An unfortunate day indeed as Replidyne (NASDAQ: RDYN) has terminated their licensing deal with Asubio Pharma for its lead drug candidate Faropenem and subsequently is expecting a charge of approximately $4.1M. Recall, Replidyne discontinued enrollment in a late-stage study testing its faropenem medoxomil oral antibiotic as a treatment for patients with acute chronic bronchitis due to an inability to secure a partner for the clinical program.

Concomitant to the terminated license agreement is termination of the supply agreement with Nippon Soda Co. Engineering costs and delayed compensation fees comprise a portion of the expected $4.1M charges.

The decision to end Faropenem is disappointing in a variety of dimensions and to a certain extent somewhat surprising that a partner could not be identified given how mature the asset is. The termination decision was executed in order to preserve cash and focus attention on the previously discussed strategic initiatives of the C. difficile infection program and novel anti-infective programs based on DNA replication inhibition technology. As of 31 May Replidyne had cash and short term investments totaling $71.5M.

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