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POINT Biomedical Corporation's Vanishing Act -- What Happened?

8/25/2008 12:36:37 PM

Point BioMedical's Vanishing Act
By Suvarna Bhatt, Feature Editor

SAN FRANCISCO – It only took a few months for Point BioMedical’s biotech dream to go under. As of last month, the San Carlos, Calif., based company focused on developing a novel product for molecular imaging withdrew its NDA and is liquidating its assets to avoid a formal bankruptcy proceeding.

According to Tom Feldman, ex-CEO of Point BioMedical, the company’s lead investor, Vendanta Capital LLC chose not to follow through with the second half of its $50 million private equity financing.

Point was expecting to draw on the second tranche of its financing from Vedanta at the end of April when they learned Vedanta’s intentions to pull out. “As a result we had to close operations,” Feldman said. “I can’t tell you why they chose not to invest.”

Point received $25 million, the first tranche of financing in February of this year. The proceeds were going to the second round of phase 3 clinical trials of the company’s lead product, CARDIOsphere®, a revolutionary drug technology that had the potential to make ultrasound imaging easier as well as delivering medicine to specific areas in the body.

CARDIOsphere®, a perfusion imaging agent that was designed to measure myocardial perfusion using ultrasound had the potential to allow patients to undergo evaluation for coronary artery disease in a cardiologist’s office without the radiation exposure of currently available perfusion technologies. It was granted a patent in 2004.

“A great deal of money had been put into that clinical trial program over the years,” said Dr. Michael Main, principal investigator of the CARDIOsphere® clinical trials that were being conducted at St. Luke’s Health System in Kansas City, MO. “I think that at some point if results aren’t forthcoming or FDA approval isn’t imminent, obviously appetite for investment diminishes.” Main said.

Enrollment in the first phase 3 clinical trial of CARDIOsphere® started in July of 2002 which lasted 18 months. Over 300 patients were enrolled. Point BioMedical received a non-approvable letter for CARDIOsphere® from the FDA in 2006.

“Basically the FDA asked for more data to be acquired and that was in fact under way when the company lost investment,” Main said. “The second phase 3 clinical trial was actively enrolling patients until just a couple of months ago.”

Main says “there’s no question” the second clinical trial was stopped due to the fact Point Biomedical did not receive funding. Like Feldman, Main is not sure why Vendanta decided to withdraw its investment.

Vedanta Capital, a New York City based diversified venture capital company is run by Parag Saxena, Alessandro Piol and Howard Goldstein, all formerly of Invesco Private Capital. When asked to comment on Vedanta’s move, Piol said the partners are not taking any interviews on specific portfolio companies.

Main says there were no safety issues behind CARDIOsphere® and the technology works well. “It’s really a sad thing that this won’t ever be brought to the market because the micro-bubble technology does work and it is helpful in detecting coronary disease,” Main said.

Feldman said he certainly believes the product still has potential for the indication it was being developed for, “we just didn’t have time to fix the situation that was created by our lead investor,” he said.

According to Main, the potential market for an agent similar to CARDIOsphere® to be used in association with echocardiography imaging to detect coronary disease or myocardial profusion is very large. It would include patients who now have stress testing with cardiac imaging.

However, there are limited number people that have been interested in this technology in the recent past. “The demise of Point BioMedical is really a negative development and certainly diminishes the chances that the agent will ever be approved for myocardial profusion imaging with echocardiography,” Main said. “It’s a big blow to the field of myocardial contrast echocardiography—there is no question about it and a big blow to echocardiography in general.”

There is one other company that is actively seeking approval for an agent for use with myocardial profusion echocardiography and that’s Acusphere Inc.

Acusphere is awaiting word from the FDA to approve Imagify, which is designed to help doctors use ultrasound to detect coronary artery disease. The Massachusetts pharmaceutical company said it cut 24 jobs and plans to cut salaries for senior managers in an effort to reduce costs while waiting for FDA approval. After these cuts, the company of 77 employees estimates it will have enough money to continue operating through nearly the end of the year.

Point Biomedical underwent an assignment for the benefit of creditors with Sherwood Partners on July 9th. Sherwood will liquidate all of Point’s assets and pay off any creditors the company has with the money they raise. Proceeds will go to shareholders if anything is left over.

“If anybody is interested in any of the products, including the IP of CARDIOsphere®, they can contact Sherwood Partners,” Feldman said.

Suvarna Bhatt is a Feature Editor for Click here to contact her.

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