Sonus Pharmaceuticals walked away yesterday from its proposed acquisition of a small French biotech company to concentrate its bets on an internally developed cancer drug.

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Sonus Pharmaceuticals walked away yesterday from its proposed acquisition of a small French biotech company to concentrate its bets on an internally developed cancer drug.

The Bothell company said it is ending the deal to acquire Synt:em, effective March 31. The original transaction, announced in November, called for Sonus to issue up to 5.4 million shares of stock to Synt:em shareholders.

At the time Sonus said it wanted to diversify its pipeline with the French company’s early-stage products for inflammatory, neuropathic and chronic pain.

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Wall Street never really embraced the idea. Investors drove Sonus stock to a 52-week low of $2.15 five days after it was announced.

Alan Fuhrman, Sonus chief financial officer, said yesterday the company chose to back out to focus more on its leading drug candidate, Tocosol paclitaxel.

The move comes one week after a rival drug, developed by Seattle-based Cell Therapeutics, stumbled in a pivotal trial.

Since the acquisition was announced, Fuhrman said, Sonus has had productive talks with the Food and Drug Administration on how to design a pivotal clinical trial.

The company now plans to begin the trial by the third quarter, possibly with up to 800 patients with breast or ovarian cancer.

The drug is a reformulation of paclitaxel, the active ingredient in Taxol, a common chemotherapy drug. Tocosol is designed to be quicker and easier to administer, cheaper to manufacture and gentler in terms of side effects.

Sonus needs to spend its cash wisely. It had $20.6 million in cash and investments at the end of 2004 and was spending at a rate of $1.5 million per month.

Fuhrman said the trial will cost $35 million to $40 million over three years because of its large size.

To offset costs and validate the drug in investors’ eyes, Sonus plans to sign a partnership with a larger drug company.

The trial is designed to clear a lower medical hurdle than the trial done recently by Seattle-based Cell Therapeutics, a competitor trying to make a milder paclitaxel.

Sonus’ trial is aimed at showing its drug is at least equally effective as standard paclitaxel; Cell Therapeutics was attempting to show its drug was superior.

The Sonus study will measure the number of patients whose tumors shrank at least 30 percent. Cell Therapeutics was trying to see if its drug extends lives.

Sonus, too, is measuring whether its drug can prolong lives but it won’t need to show that to win FDA approval. It hopes to get the study parameters and goals inked in a contract in three months.

“If we designed our trial around showing it is superior to Taxol, and we don’t do it, the game’s over,” Fuhrman said. “We were not willing to make that play. What we’re doing here is not a bet-the-company strategy.”

Alan Leong, director of research with Biotech Monthly, a Seattle-based newsletter, said he liked the decision. Leong owns shares of the company.

“They’re not a rich company in cash,” Leong said. “People on the Street really would like to see them keep their focus on Tocosol.”

Luke Timmerman: 206-515-5644 or ltimmerman@seattletimes.com