Bloomberg.com: AtheroGenics Drug That Failed in Study Cuts Diabetes (Update2)

March 27 (Bloomberg) -- AtheroGenics Inc.'s experimental heart drug, which failed to meet a primary study goal last week, reduces diabetes and deaths from heart disease and should be developed, doctors said. Shares soared as much as 26 percent.

The medication, an anti-inflammatory known as AGI-1067, lowered deaths from heart attacks, cardiac arrest and strokes by 19 percent in the study, details of which were presented at the American College of Cardiology meeting in New Orleans. It cut by 64 percent the number of patients diagnosed with diabetes.

The study was initially designed to measure effectiveness against a range of complications, including chest pain. AtheroGenics reported last week that the medicine failed to meet the wider goal, though details weren't available. Doctors now say the drug should be developed because of how it works individually against deaths, heart attacks and diabetes.

The results ``are very encouraging and suggest that the drug is having a beneficial effect,'' said Steven Nissen, president of the cardiology group and chairman of cardiology at the Cleveland Clinic, in an interview. ``Someone should pursue further development of this drug.''

AtheroGenics' stock rose 17 cents, or 4.8 percent, to $3.75 at 11:14 a.m. New York time in Nasdaq Stock Market composite trading, after touching $4.54 earlier. The stock plunged 61 percent last week after the company first announced the trial failed to meet its primary goal, trading low as $2.83.

Marketing Agreement
London-based AstraZeneca Plc has a marketing agreement with AtheroGenics to develop AGI-1067 that could be worth as much as $1 billion if the drug completes development and hits sales goals. AstraZeneca hasn't yet told AtheroGenics if it plans to continue working with them on the product, said Russell Medford, Chief Executive Officer of AtheroGenics, in an interview today.

AGI-1067 is designed to counter the buildup of plaque in the arteries that occurs in 16 million Americans. More than 6,000 patients in the U.S., U.K., Canada and South Africa took part in the phase III study, the last stage generally required for regulatory approval.

Patients in the study were already getting drug therapy for the year following a heart attack or sudden on-set of chest pain, suggesting that the new medication may provide additional benefit beyond the current standard of care, researchers said.

Heart disease is the leading cause of death worldwide and kills 700,000 people in the U.S. each year, according to government statistics. The drug is the first in a new class that aims to treat heart disease by fighting inflammation.

Additional studies are needed to confirm the benefits and ensure the drug is safe. Patients getting AGI-1067 were more likely to be hospitalized for heart failure and develop diarrhea in the study.

There were also signs that the drug might affect liver function. One patient developed liver failure and recovered after the drug was halted.