Nitromed's challenge
The old, familiar question might be asked this way at Nitromed Inc. : Is the glass 3 percent full or 97 percent empty?
Nitromed, a small pharmaceutical company in Lexington, will sink or swim based on the performance of its high-profile drug BiDil, a landmark treatment for black patients with heart disease. So far, the results aren't encouraging, and time is growing short.
Chief executive Jerry Karabelas , speaking on the company's quarterly conference call with stock analysts last week, really did frame the issue of BiDil's weak adoption rate among its patient population as a matter of how you looked at the glass.
``One way is to say, `Gee, I am very disappointed we only have about 3 percent of eligible patients taking BiDil,' " he said. ``The other way is, very optimistically, to say: `I have 97 percent of patients to penetrate.' "
Karabelas is required to take the very optimistic view. Investors have come to other conclusions. Nitromed stock, down 82 percent so far this year, is the worst performer among 243 Massachusetts public companies in 2006. Nitromed shares took a hit last week when the company reported a disappointing quarter and took back its forecast for full-year sales.
The stock, which approached $27 in January 2005, closed yesterday at $2.51. Keep in mind, Nitromed has about $2 per share of cash on its balance sheet.
Another way to look at that cash: It will be gone in about a year, based on Nitromed's current business projections.
Small drug or biotech companies trying to build themselves around a new product often require several rounds of financing. But Nitromed and its shareholders will end up paying through the nose for fresh cash unless they can tell a more compelling story soon.
BiDil was a very big and disputed deal when it became the first drug approved in the United States for a specific race last year. Clinical trials had been halted early because results were so good.
But that hasn't translated into big sales for Nitromed. The company struggled to improve the reimbursement levels insurers were willing to pay for BiDil, which is actually a combination of two generic drugs. Some doctors prescribed the generics in combination instead of BiDil.
Unlike drugs for rare diseases, which can be marketed to a small group of medical specialists by a modest sales force, any treatment for black heart disease patients must be sold to a much larger number of cardiologists and other doctors. That poses scale issues for a small company like Nitromed selling a drug itself, rather than licensing it to a giant pharmaceutical company.
Nitromed's stumble out of the gate cost the company's top executives their jobs this spring. Karabelas, the new chief executive, and Kenneth Bate , a new chief financial officer, worked on a plan to turn BiDil sales around right away. One key element: Replace Nitromed's 200-member contract sales force with about 120 sales people employed directly by the company.
Bate says prudent use of cash and skilled direction of the Nitromed sales force can get the company back on the right foot.
``The solution is not necessarily great gobs of money or a 1,000-person sales force," Bate says. ``We've made it clear we need to see results sooner rather than later, measured in weeks and months instead of months and years. We believe the things we've done will lead to a positive trajectory."
Another idea: Find a new owner for BiDil before Nitromed burns through its remaining cash. A bigger heart-drug company with a bigger sales force could add BiDil to its list of products and better absorb the growing pains of a developing new treatment. That would be one way to fill the glass.
Steven Syre is a Globe columnist. He can be reached at syre@globe.com. 
