Why It's Fierce: Every biotech company likes to strike a licensing deal when the iron is hot. For Arakis -- and its partner Vectura -- the iron turned red-hot for its Phase II COPD compound, AD237. The results were good enough to bring in Novartis, which paid Arakis $15 million up front and agreed to another $172.5 million in milestones and other fees. The deal helped sanction Arakis' commercial strategy: prove a drug through Phase II and then find a big pharma outfit to come in and take over. Another compound, AD452, has just wrapped a successful IIa and a IIb trial is in the works to demonstrate efficacy for rheumatoid arthritis. And AD923 for cancer pain is advancing from Phase I into Phase III. Three other compounds are in earlier stages of development.
What to look for: Look for new trial data on 452 by the back end of 2006 with 923 starting Phase III in November. A new partnership arrangement is likely. Arakis can wait for the market to improve, and when it does a float is inevitable.