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Drug Developer Furiex Debuts

Drug Developer Furiex Debuts [The News And Observer, Raleigh, N.C.]

From News & Observer (Raleigh, NC) (June 16, 2010)

Jun. 16--The Triangle’s newest publicly traded company is starting out with a nest egg of $100 million to advance its drug development efforts, but it isn’t dazzling Wall Street so far.

The new Morrisville company,Furiex, was spun out of Wilmington-based pharmaceutical services company PPD on Monday, when PPD shareholders received one share of Furiex common stock for every dozen shares of PPD they held. Before the spinoff, PPD transferred $100 million in cash to Furiex.

The spinoff makes PPD a contract research organization focused on helping clients test and market new drugs, said Jefferies & Co. analyst David Windley.

Furiex, a company with 25 employees, collaborates with larger pharmaceutical and biotechnology companies to take drugs through the second phase of the three-phase drug-development process. Then it turns over the final stage of development to a partner.

"To our knowledge, there hasn’t been another company that employs this model," said June S. Almenoff, a former GlaxoSmithKline executive who recently joined Furiex as president and chief medical officer.

Fred Eshelman, PPD’s founder and chairman, also is chairman of Furiex.

Value of stock slides

Still, investors are taking a wait-and-see approach.

Furiex, which trades on the Nasdaq under the ticker symbol FURX, closed at $9.30 Tuesday, down $1.65. That put the company’s market value -- the value of its outstanding stock -- at $92 million.

Given that it started with $100 million cash, that stock price "doesn’t value the pipeline" of drugs Furiex has, Windley said.

The company cautions in its filings that its past financials as part of PPD don’t necessarily reflect what they would have been if Furiex had been a stand-alone company.

Furiex also states in SEC filings that it expects "to incur additional net losses over the next several years" because of its drug-development costs.

The company, which receives royalty revenue and milestone payments from its partners that have fluctuated significantly, posted a loss of $8.9 million on revenue of $6.3 million last year.

The company is working on several experimental drugs. Two that Furiex helped develop have won approval for marketing in a number of countries:

Priligy, the first approved treatment for premature ejaculation. The drug, which Furiex developed with Johnson & Johnson, has been approved for marketing in more than a dozen countries, including Argentina, Germany, Italy and Spain.

The U.S. Food and Drug Administration found a 2005 application for Priligy insufficient, but Furiex’s partner "is investigating regulatory strategies for a potential refiling with the FDA," according to SEC documents.

Nesina, a treatment for type 2 diabetes that was approved in April in Japan. The drug was introduced this week by Furiex’s Japanese collaborator, Takeda Pharmaceuticals. In the U.S., the FDA has requested an additional clinical trial, which is under way.

More drugs in pipeline

Furiex also is developing an antibiotic, a treatment for irritable bowel syndrome and a cholesterol medication.

The company contracts out much of its work and doesn’t anticipate hiring additional staffers anytime soon, Almenoff said.

She said the "opportunity to work with a team of great drug developers and a really interesting and innovative business model" lured her away from GSK, where she was involved in drug development as a vice president. Before joining GSK, Almenoff was on the faculty at Duke University Medical Center. or 919-829-4877

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Posted: June 2010