Biotech Implosion: Epix Depressed on Depression Treatment Failure (EPIX)

EPIX Pharmaceuticals, Inc. (EPIX) has seen shares essentially chopped in half today.  Early this morning the company announced that it was discontinuing its PRX-00023 clinical development program after Phase IIb trials over a lack of significant efficacy.  Ironically enough, this was in patients with major depressive disorder.

Its really too bad this didn’t work out.  All of the employees with stock options and all of its shareholders may need a treatment for that today and this weekend.  While this is horrible news, the company is no one trick pony like so many small emerging biotechs.  The bad news is that isn’t anywhere near its first spate of bad news.  It has been public since the late-1990’s and traded north of $30.00 back in 2000 and in 2004.

It does have other programs with Amgen and other major players:

• Collaboration with GlaxoSmithkline in Phase IIb Alzheimer’s disease program;
• Bayer Schering Pharma for Vasovist® in Phase III re-reads from FDA;
• Pulmonary hypertension associated with chronic obstructive pulmonary disease;
• Cognitive impairment;
• EPX-102216, a CCR2 antagonist for MS, pain, type 2 diabetes, and atherosclerosis;
• EPX-16006, a potential first-in-class small molecule P2Y2 antagonist for the treatment of constipation-predominant irritable bowel syndrome and chronic constipation.

Shares are now down 51% at $1.51 today, which is a new low under its 52-week trading range of $2.63 to $7.28.  Its market cap is $62.5 million.  On a brief look at the balance sheet its assets and liabilities are inverted as far as deriving any net cash value on the books, although that might not be the case depending upon its partnerships.

Jon C. Ogg
March 20, 2008