MiddleBrook, which changed its name from Advancis Pharmaceuticals last year, serves as a case study in the development of biotech companies. Like many of its peers, MiddleBrook never turned a profit and spent far more than it raised in sales to perform clinical trials and gain FDA approval for its drugs. Through its first four years, the company did not report any revenue. During its second four years, MiddleBrook had revenue of about $22 million - but it spent $195.6 million over the same period.
It can take a dozen years and a billion dollars to bring a drug to market, and many small biotech businesses find they can't do it on their own. They often partner with larger pharmaceutical companies looking for new products or allow themselves to be acquired.
Rudnic, a former pharmaceutical company executive, founded MiddleBrook in 1999 with $1 million in venture capital funding. The company was based on finding a better way to deliver doses of antibiotic. Typically, antibiotics are taken three or four times a day. But, Rudnic wanted to try "pulse dosing, rapid staccato bursts."
The early lab work was a success. Pulses appeared to kill germs better than standard dosing. And it seemed to have promise for parents who have long sought out easier and less frequent ways to deliver medicine to their children.
The company raised $60 million in an initial public offering of stock in October 2003, and its lab success led to more private investment.
Needing even more money to go through the lengthy trials needed to bring a drug to market, MiddleBrook struck a deal with giant GlaxoSmithKline in July 2004. Glaxo would provide much of the funding for development in return for a partnership in marketing a pulse-dose version of GSK's antibiotic Augmentin. The deal with an established pharmaceutical company helped boost MiddleBrook's credibility and profile. But Glaxo pulled out of the deal in December of that year.
Running low on money in 2005, MiddleBrook Pharmaceuticals raised enough to complete two final clinical trials the next year on a promising timed-release version of Amoxicillin. It suspended work on its other drug candidates, and bet everything on the two trials.
Both clinical trials failed. The company's board of directors convened an emergency meeting.
"It was seriously discussed - I mean deadly serious - that we fold the company down and distribute the cash," Rudnic recalled in an interview earlier this year. He could not be reached yesterday.
