Thursday, October 23, 2008

NitroMed to sell its only revenue source, BiDil, for $24.5M

By Mass High Tech Staff

Targeted drug maker NitroMed Inc. plans to sell its BiDil drug business to JHP Pharmaceuticals LLC for a possible $26.3 million. New Jersey-based JHP, a privately held specialty pharmaceutical company, will buy the assets related to BiDil for $24.5 million in cash, plus up to an additional $1.8 million for inventory at the closing date.

JHP will also assume all but some specified liabilities related to the assets it is acquiring, according to officials. The companies say they expect to complete the sale in early 2009.

According to NitroMed (Nasdaq: NTMD) officials, the deal has the backing of a number of its investors, from firms including HealthCare Ventures LLC, Rho Ventures and Invus Public Equities LP.

In January, Lexington-based NitroMed laid off most of its staff and suspended marketing efforts for BiDil, a heart failure pill designed specifically for African-American patients. BiDil is approved in the United States as an adjunct to current standard therapies. At that time the company said it planned to study an extended release implementation of BiDil.

The company at that time also hired investment banking firm Cowen and Co. LLC for advice on the firm’s strategic options.

NitroMed also reported its financial results for the third quarter which ended Sept. 30. The company’s total revenues climbed slightly to $4 million, compared to $3.8 million for the same period in 2007. All of that revenue came from sales of BiDil, officials said. NitroMed’s net loss dropped to $400,000 for the quarter, compared to a net loss of $8.4 million last year.