FoxHollow, Merck Partner to Identify Cardiovascular Disease Biomarkers

FoxHollow Technologies (Redwood City, CA) and Merck & Co. Inc. (Whitehouse Station, NJ) have entered into what the companies report is the first pharmaceutical-medical device partnership focused on identifying cardiovascular disease biomarkers. It is the hope of both companies that the biomarkers could be used as diagnostics and tools for drug development.

Under the agreement, FoxHollow is providing Merck with exclusive access to atherosclerotic plaque samples collected from cardiovascular-disease patients treated with FoxHollow's SilverHawk plaque excision system. The SilverHawk, a catheter system that removes plaque blocking blood flow in arteries, is used to treat peripheral arterial disease, which affects an estimated 12 million Americans.

"We currently assess risk of heart disease using blood markers such as cholesterol, blood pressure, blood sugar, and CRP, but none of these provides a direct view of the immediate cause of disease, which is atherosclerotic plaque," says Richard Pasternak, MD, vice president of clinical research at Merck. "Our collaboration with FoxHollow has the potential to provide insight on cardiovascular disease and to accelerate development of novel drugs for this widespread health issue."

The FoxHollow deal with Merck was hailed by medtech analysts as a positive move, with several describing it as "lucrative." Under terms of the agreement, FoxHollow will receive an initial $9 million cash payment from Merck for the first year of research collaboration, which could be extended for an additional two years. If Merck elects to continue the partnership after the first year, FoxHollow will receive additional payments of at least $7 million and up to $31 million over the following two years. FoxHollow would also receive milestone payments and royalties upon achievement of the collaboration's objectives, including the development of a pharmaceutical by Merck.

FoxHollow collects atherosclerotic plaque samples through its Talon project, a national, multicenter registry for tracking outcomes following treatment with the SilverHawk system. The registry provides site-specific and aggregate data on the acute and long-term results of plaque excision in the femoral-popliteal and tibial-peroneal vessels. Clinical endpoints of the study are 6-month and 12-month target lesion revascularization rates and patency rates.

In addition to tracking clinical results, the Talon registry is designed to correlate outcomes with histology findings and genomic profiles. Plaque excised from enrolled patients is preserved for analysis. The ability to link actual long-term clinical results with histological, genomic, and proteomic information embedded in the plaque may help lead to the identification of restenotic and arterial disease markers.

"We knew all along that there’s potential to have extremely valuable information inside the plaque—looking at the cells, the proteins, the enzymes, etc.," says FoxHollow president and CEO Robert W. Thomas. "The challenge that we faced was identifying the appropriate partner who had the vision, the willingness to make a commitment, and the ability to really analyze this plaque in a way that has never been done before."

"Merck has all three of those things," says Thomas. "The absolute best people in the world reside inside the Merck organization, and they’re committed to try and understand in a much better way what's happening on a cellular level by virtue of having their hands on this plaque."

FoxHollow officials were unable to say what level of progress would need to be seen for Merck to extend the agreement into the second year.

"As an undisputed leader in advancing cardiovascular medicine, Merck is the best possible partner for this collaboration," says John Simpson, MD, PhD, chairman of the board of FoxHollow. "It is our greatest hope and expectation that this partnership will lead to a more precise understanding of cardiovascular disease, and result in innovative new medicines that are specific for an individual patient."

FoxHollow continues to receive a great deal of attention from the investment community. Since the company went public at the end of last October with an opening price of $14, FoxHollow stock, trading on the Nasdaq exchange as FOXH, has increased in price by about 350%. At press time it was around $48 and has been as high as $55.

In 2004, FoxHollow reported a net loss of $29.9 million on revenue of $38.6 million, compared to a net loss of $14.3 million on revenue of $2.6 million in 2003.

For its second quarter this year, which ended prior to the announcement of the Merck collaboration, FoxHollow reported revenue of $28.7 million, up 33% over the first quarter of 2005, and up almost 300% over its 2004 second quarter. The net loss for the quarter was $3.4 million, compared with a loss of $6.5 million in the first quarter and a loss of $8.8 million in the year-ago period.

Canon Communications LLC

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