article by Gene Marcial with msn-Money's Top Stocks!
]]>Subjects in BLOOM-2 who were treated with LibiGel showed an increase of 1.0 day with a satisfying sexual event compared to baseline, while those receiving placebo gel showed an increase of 1.28 days with a satisfying sexual event compared to baseline. Subjects in the first trial, BLOOM-1, who were treated with LibiGel showed an increase of 1.47 days with a satisfying sexual event compared to baseline, while those receiving placebo gel showed an increase of 1.26 days with a satisfying sexual event compared to baseline (p=0.463). No, we didn’t misplace the decimal there – the statistics suggest that any treatment effect is just as likely due to placebo effect as to drug effect. Wow – these data are vastly worse than even we expected!
This is a huge disappointment for BPAX and we expect the stock to get hammered tomorrow when it resumes trading. The stock should open below $1.00 and could easily break $0.50 considering this is some of the worst clinical data you will ever see. The company will end the year with $56 million in cash and has traded near that level in after-hours trading. We recommend that you cover all shorts and puts today. We will cover our BPAX short using the closing price from tomorrow, Thursday, December 15.
]]>Our top story this week is a recommendation of a short sale of BioSante Pharmaceuticals (BPAX) over $2.25 with a target price of $1.25. The company has a treatment (LibiGel testosterone gel) in Phase III clinical trials which, if approved, would be the first-to-market therapy for hypoactive sexual desire disorder (HSDD). The drug is a transdermal gel delivery of testosterone intended to increase female libido. There’s a catch, though – there are reasons why there are no approved therapies for HSDD or other female libido drugs are on the market. The first reason is safety. A year ago German drug maker Boehringer Ingelheim announced it was scrapping plans to develop its female libido drug because of safety concerns. Proctor & Gamble ran into similar regulatory concerns last decade over its testosterone patch. The second reason is the lack of clear and definable clinical endpoints for HSDD. If there’s one key lesson we’ve learned about clinical trials, it’s ask one question and answer it clearly. The LibiGel Phase III trials have multiple endpoints, making it harder to get a statistically significant result.
On October 4, 2011, BPAX announced the completion of its two pivotal LibiGel Phase III efficacy trials. Trial data are being collected from the 141 investigative sites in the U.S. and Canada that participated in the trials and the company is, for now, blinded to the results. BPAX expects to announce top-line LibiGel efficacy results from both trials before the end of the year. We do not have to wait long to see if we are right about this short sale as results could come within days.
The LibiGel clinical development program also includes the ongoing LibiGel Phase III cardiovascular event and breast cancer safety study, which completed enrollment of 3,656 subjects in June 2011. On October 11, BPAX announced that an independent DSMB completed its seventh unblinded safety review and recommended that the study continue according to the FDA agreed protocol. The primary analysis of safety data is targeted for the third quarter of 2012. The LibiGel New Drug Application (NDA) submission will include data from the two efficacy trials as well as the safety study, and is targeted for the fourth quarter of 2012. Given the history of safety problems using testosterone to treat female libido, the FDA required this safety trial.
BPAX has a current market cap of $280 million. The company has only $50 million in cash and is burning $12 million a quarter which amounts to less than a year of cash. The stock could easily be cut in half if LibiGel fails in Phase III, with some of the remaining value attributed to the TEVA hypogonadism indication. BPAX also is developing a portfolio of cancer vaccines and other programs. These programs are not, however, what you would call inspiring. Moreover, as we know in biotech the lead clinical program is the only thing that really matters for the valuation.
BPAX CEO Steven Simes has said the market for LibiGel may be at least $2 billion – the estimate for erectile dysfunction drugs. We find this comment to be boastful at best as even the most bullish BPAX analysts have peak sales just over $500 million. Identifying the market for this drug is hard enough; successfully converting that potential market into actual sales is another problem altogether.
The SPA agreement for the pivotal Phase III covers safety and efficacy of LibiGel in the treatment of FSD. The Phase III safety and efficacy trials are double-blind, placebo-controlled trials each of which will enrolled approximately 500 surgically menopausal women for six-months of treatment.
The primary endpoints in the LibiGel clinical trials are:
The secondary endpoint is:
We don’t think you’ll need any convincing that these are soft endpoints, and BPAX will have difficulty attaining statistical significance. One of the most important keys to successful Phase III trials is narrowly defined endpoints that basically seek to answer one question. One variable is enough to trip many clinical trials and adding multiple variables is a way to trouble in the form of poor results. These trials will use patient surveys to obtain much of the data. Patient surveys are notorious for providing mixed results because, again, you are asking multiple questions.
Most importantly, we expect a large placebo effect in these trials. Frankly put, thousands of years of history regarding aphrodisiacs prove the importance of patients’ state of mind and expectations when it comes to compounds advertised as improving one’s sex life. We are recommending a short sale of BPAX above $2.25 with a target price of $1.25.
]]>We celebrated our 700th Issue, but you get the presents. In the interest of deepening investors' knowledge and illuminating the history of the Biotech Industry, BioInvest.com has made 15 yearsa of the Medical Technology Stock Letter freely available online. The oldest newsletter devoted to the sector, MTSL has been continuously published for almost 30 years and continues to lead the industry in insight and analysis.
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]]>Incyte (INCY) and their partner Novartis have reported that ruxolitinib (INC424), has met its primary endpoint of significantly reducing spleen size in patients with myelofibrosis (MF), when compared to best available therapy in a second Phase 3 trial. The European study, called COMFORT-II, showed that treatment with ruxolitinib provided a statistically significant reduction in spleen size in patients with primary MF, post-polycythemia vera myelofibrosis (PPV-MF), or post-essential thrombocythemia myelofibrosis (PET-MF), when compared with best available therapy. The company reported that the safety profile for ruxolitinib was consistent with previous studies. Regarding concerns about the potential for anemia, we will have to see the full details before we can put the issue to rest. Complete study data was not revealed in the company’s press release which will allow INCY to submit the data for presentation at an upcoming medical meeting. We expect the data to be presented in Chicago at this year’s ASCO. It should be well received since there are no current treatments approved specifically for MF.
An NDA filing for ruxolitinib consisting of COMFORT-II and COMFORT-I will be submitted to the FDA in the second quarter, with a European filing shortly following the FDA filing. The drug candidate has received orphan drug status in both the U.S. and in Europe which means that it will be reviewed in six months, rather than the normal 12 months for regular NDAs, positioning ruxolitinib for two regulatory approvals by year-end. The news flow for the drug candidate in 2011 will be outstanding:
• Submit NDAs in both U.S. and Europe in Q2.
• Present COMFORT-I and COMFORT-II data at ASCO in June.
• FDA advisory committee meeting.
• Receive FDA/European approvals in late Q3/early Q4.
• Launch ruxolitinib in the U.S., possibly before the end of the year.
We raised our buy limit on INCY in late January from $12 to $15 based on a short piece (written by supporters of a rival drug from YM Biosciences, which has potential, but clearly is behind ruxolitinib) that claimed ruxolitinib caused anemia and only reduced symptoms. They claimed these problems would lead to an inevitable delay by the FDA. We believe that the addition of positive Phase 3 results from COMFORT-II to COMFORT-I will be sufficient to earn ruxolitinib regulatory approval. Finally, the full data set that we expect to be presented at ASCO should put to rest lingering safety concerns. 2011 is shaping up to be a transformative year for INCY as they bring their first drug to market. The bottom line is that stock is less risky now than when we raised our buy limit in January. Since that time the stock price has drifted lower, and we urge subscribers to take advantage. INCY is a buy under $15.
]]>AMLN’s stock was down over 25% and ALKS stock was down over 10% on good data that wasn’t quite as good as their competitor’s. We believe that the 25% sell-off is an over-reaction as Bydureon is much closer to approval and the path is much clearer than it was last year when the FDA requested more information on Bydureon. In previous trials Bydureon’s A1C was better than Victoza and A1C is not the only criteria for an effective diabetes drug. Bydureon has consistently provided better weight loss than Victoza and has shown about half the side-effects. Most importantly, Bydureon is a once-weekly injection vs. a daily injection for Victoza, (one needle stick vs. seven needle sticks a week), which is very important to patients. While doctor’s certainly understand the importance of biomarkers like A1C, a patient’s comfort and compliance are also considered, and we think that this data will not discourage doctors from trying Bydureon.
We believe that this week’s decline has more than discounted the disappointment from DURATION 6 which did show Bydureon to highly effective, just not quite as good as Victoza. We are also much closer to the re-filing of Bydureon with the FDA then we were in October. We also have added clarity as the NDA will be re-filed by year end. Therefore, we are raising our buy limit on ALKS from $12 to $13 to take advantage of today’s opportunity. ALKS has done a tremendous job creating value in their pipeline, and Bydureon still represents significant revenue growth for both ALKS and AMLN. While we are disappointed in the news, we believe that both stocks have been over-sold and urge subscribers to either add or establish positions in AMLN and ALKS.
]]>Inside Wall Street: Every January, It's a Four-Day Health Care Fest in San Francisco
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