The Medicines Company celebrates Nasdaq listing

By DANIEL RIORDAN

They may not have space to swing a champagne bottle, but Dr John Villiger and his team at The Medicines Company are this week celebrating their $US96 million ($204 million) listing on Nasdaq.

The shares listed at $US16 ($34) and finished their first day's trading (Tuesday night NZ time) at $US21.50. About 25 per cent of the company was floated, giving it a market capitalisation of around $US537 million.

However you can be excused if you have never heard of The Medicines Company or the team of six that work out of a cramped office in Parnell, directing worldwide clinical trials for the Boston-based company.

Vice-president Dr Villiger is a Kiwi from the Waikato who worked for pharmaceutical giant Hoffman-La Roche, here and at its headquarters in Switzerland, before joining Medicines, which had been started by former Roche colleague Dr Clive Meanwell in 1996.

Dr Meanwell used his connections to raise venture capital - more than $US170 million so far - while Dr Villiger, keen for his family to again embrace the New Zealand lifestyle, chose to head the company's drug development work from Auckland.

Medicines identified a market niche, observing that as the drugs multinationals expand through acquisitions and organic growth, the pressure to produce king-hit revenue products mounts and they tend to divest their intermediate, smaller products. Most of the company's products have been through their early stage testing. Late-stage development may be less risky, but it is highly capital-intensive.

Medicines is not the only company trying to do this, notes Dr Villiger, but it has been one of the most successful.

This is largely thanks to its ability to raise the financing needed for late-stage drug development. By that stage potential investors have a far clearer idea of whether the drug works, its safety profile and how it can be manufactured.

Its share register before listing included the venture capital arms of Warburg Pincus, Morgan Stanley, BB Biotech and venture capitalist Alta Partners.

As well as payment for the intellectual property to the drugs, the big drug companies typically receive milestone payments and royalties as smaller companies like Medicines take the drug through to market.

Medicines' first product is Angiomax, an anticlotting drug developed to treat heart disease. It bought the drug from leading US biotech firm Biogen in early 1997 after Biogen decided to concentrate on developing a beta interferon drug for multiple sclerosis.

Angiomax was approved in New Zealand last year to treat patients undergoing coronary balloon angioplasty and is being used in three hospitals here.

But the drug's big breakthrough came last May when the all-powerful US Food and Drug Administration issued its "approvable letter" - the final step before full approval.

Medicines hopes to be selling Angiomax in the US within 12 months of final Medicines approval and will use the funds from the Nasdaq listing to market the drug.

While the Parnell office ran the Australasian trials for the first use of Angiomax, it is taking a worldwide role for the drug's second application, reducing the incidence of acute heart attacks.

Trials for that use - involving 500 hospitals and 17,000 patients around the world - are being overseen by Dr Harvey White, an internationally renowned cardiologist based at Green Lane Hospital and a member of Medicines' medical advisory board.

Dr White had been involved in early stage development on Angiomax when it was owned by Biogen.

Medicines, which outsources its manufacturing, has 45 staff worldwide at its three offices in Boston, Oxford in Britain and Parnell. But it aims to employ 100 by year-end on the back of the Nasdaq listing.

It is also developing two more products, an anti-infective and an anti-migraine drug.

Dr Villiger's financial stake in the company is relatively small - about 200,000 shares, less than 1 per cent of the total. But with each of those shares worth more than $40, that is a handy sum.