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Biotech Notebook: Medarex, Panacos, Advanced Life

Adam Feuerstein

Medarex(MEDX Quote) held a conference call Tuesday morning to discuss the results from the key trial of its skin cancer drug ipilimumab, and as with Monday's press release, the ratio of bamboozlement to hard facts was, unfortunately, off the charts.

For months now, on conference calls and at investor meetings, Medarex executives have sworn that there was no efficacy hurdle mandated by the Food and Drug Administration for its ipilimumab trials. But it seems clear from Monday's announcement and Tuesday's call that there was such a hurdle -- and Medarex tripped right over it.

The FDA wanted to see an ipilimumab response rate strong enough (probably in the mid-teens) to ensure that the lower bound of the confidence interval was above 10%. That was the primary endpoint of the phase III ipilumumab study in melanoma.

Medarex didn't get there. The company admits that fact. Therefore, the study failed.

Sounds like game over to me.

Yet, Medarex, on Tuesday's conference call, asked investors to disregard the failure of a pivotal trial. Instead, executives pointed everyone to the importance of the "totality of the data."

That's a catchphrase used so often by Medarex that it must be part of the company's mission statement or printed on the coffee cups in the corporate break room.

If you believe Medarex, this "totality of the data" is what the FDA has asked for and will use to review ipilimumab. It won't matter that the pivotal study failed, because all the other clinical data will convince regulators to approve the drug.

Really? This FDA? The FDA that took a baseball bat to the knees of Genentech(DNA Quote) last week when it was trying to get Avastin approved for metastatic breast cancer? Avastin, one of the most successful and effective cancer drugs on the market, can't get a thumbs-up from an FDA advisory panel to treat terribly sick women with metastatic breast cancer, but Medarex is going to succeed with ipilumumab in melanoma using a failed study?

Hmmm. Good luck with that.

Everyone knows that melanoma patients lack good drugs to treat their cancer. And, of course, everything should be done to find and approve those drugs for them. But the FDA sets a very high bar for cancer drugs, and lately, it seems as if that bar has been raised.

The Medarex version of events when it comes to its dealings with FDA personnel seems a bit too fantastical to me. And the company clearly lacks the kind of jaw-dropping, unequivocal clinical data that prove ipilimumab's efficacy beyond any doubt.

So any FDA filing for ipilimumab is a Hail Mary pass. Those usually don't end well. Ipilimumab might one day be approved as a skin cancer treatment, but not on this go-around. That's been my call, and I'm sticking with it.

As for Medarex's stock, it's down 20% in Tuesday trading to $10.60. Medarex does have a pipeline of other drugs and some good partnerships. And there are enough believers in ipilimumab to counter the skeptics like myself. It's not hard to see this stock staying in the $8-$11 range.

I've had a soft spot in my heart for Panacos Pharmaceuticals(PANC Quote), hoping that the company could finally figure out how to develop its HIV/AIDS drug beviramat.

Sadly, Panacos provided an update on beviramat Monday night that was anything but hopeful. It seems as if patients given a 350 mg dose of beviramat didn't respond as well as patients given a lower 300 mg dose. The company can't explain why a higher dose of beviramat didn't prove to be more effective, as expected.

The company suspects that there might be a subpopulation of HIV patients who respond (or don't respond) to beviramat, but so far, it doesn't have a way of identifying those patients.

The news sent Panacos shares tumbling more than 50% Tuesday.

I've been on the sideline with Panacos because I wanted to see evidence of beviramat progress. Monday's news, however, seems like a big step backward.

I don't see how this company digs out of the mess. It's not likely to find a partner, and that means it will need to raise more money next year. And with the stock in the gutter, that's either going to be difficult or highly dilutive.

Speaking of drug companies seeking cash, Advanced Life Sciences(ADLS Quote) took care of its pressing financial needs Tuesday by raising $20 million through a private placement of 10 million shares and warrants. The stock sold was priced at $1.90 a share.

Hopefully, this cash will help Advanced Life Sciences move to the next step of finding a partner for its antibiotic cethromycin.

Advanced Life Sciences was down 7.9% in Tuesday trading.

Lastly, check out this two-part series from the Cleveland Plain Dealer on the FDA's Fast-Track program and how drug and biotech companies mislead investors into thinking it's more important than it really is. I'm quoted in part one of the series.

The articles go into a lot of good detail and explanation, more so than when I wrote about the Fast Track finagling back in 2003.