Healthy Skepticism Library item: 7304

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Publication type: news

NitroMed fires entire sales team, shares fall
Reuters 2006 Oct 11
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061011:MTFH68556_2006-10-11_16-46-47_BNG125346&type=comktNews&rpc=44

Abstract:

NitroMed Inc. on Wednesday said it fired its sales team of 120 people, four months after taking them onto its payroll, to focus resources on development of a new version of its heart drug BiDil.

Shares of the company fell nearly 8 percent in afternoon trade, hitting year-low levels. The stock has fallen more than 85 percent in the last one year. NitroMed said its marketing strategy has not been effective and that the job cuts would reduce operating expense by $30 million a year. The company will take a restructuring charge of $4 million in the fourth quarter, it added.

“Market results have forced us to think more creatively about our approach to market penetration and we know with certainty that our current selling strategy is not economically viable,” NitroMed’s Chief Executive Argeris Karabelas said in a conference call.

NitroMed had launched BiDil in July of last year and had forecast sales of $20 million for the drug in 2006. However, sales in the first six months of the year were just $5.2 million.

The company took its sales team, earlier working on contract, onto its payroll in June deeming the move “more effective and cost-efficient.”

NitroMed said it would now employ a marketing team of about 35 people, including cardiovascular specialists, and use a “less costly approach” to market BiDil, which is targeted at African-American patients with heart failure.

NEW FORMULATION

NitroMed also said it will accelerate the development of an extended release formulation of BiDil, currently marked as an immediate release formulation.

Preclinical results of the new formulation have been positive and the company now expects to enter into clinical studies with a once-daily formulation within a month, a NitroMed statement said.

In March, NitroMed’s then chief executive and chief financial officer had resigned. Later in the month, the company had eliminated about 30 positions in research and development to cut cost.

NitroMed shares, which were trading over $19 a year ago, fell to $2.34 on the Nasdaq after touching their year-low of $2.16 earlier in the day. (Additional reporting by Supriya Kurane)