We can only imagine how excited the folks at a small pharmaceutical development company called Verus were when they signed a deal with the mighty AstraZeneca in the spring of 2007. AstraZeneca agreed to pay Verus $30 million to develop its early-stage pediatric asthma drug, with an eye toward a preliminary October 2008 meeting with the Food and Drug Administration to receive approval for clinical testing. If all went well, AstraZeneca would then pay Verus another $280 million to acquire rights to the drug.

All didn’t go well. Early testing on rats and dogs revealed serious safety issues. By September 2008, AstraZeneca was talking about discontinuing animal testing. In fact, at a Sept. 18 meeting, someone from AstraZeneca asked Verus if the company planned to repurchase development rights to its drug, under a contractual agreement that permitted Verus to reacquire rights for $1.