Biotech Stock Mailbag: AspenBio

BOSTON (TheStreet) -- Let's kick off this week's Biotech Stock Mailbag with a tweet from @Budfester, who asks, "Got any feeling about AspenBio Pharma(APPY)?"

AspenBio will likely release results from the phase III study of its AppyScore appendicitis blood test in June, around the same time the company plans to re-file for AppyScore's approval with the U.S. Food and Drug Administration, according to AspenBio Vice Chairman Greg Pusey and CFO Jeff McGonegal, both of whom spent some time talking to me this week.

It's easy to file for FDA approval, convincing FDA to grant approval is a bit more difficult. AspenBio knows this well because the company pulled AppyScore from the FDA's medical device review process last year, choosing instead to conduct a new clinical trial and resubmit.

McGonegal insists that there was nothing wrong with the data from the previous phase III study of AppyScore; the company merely felt that it was quicker and faster to run a new clinical trial rather than try to answer FDA's questions with data from the old study.

I must say, that answer had my head spinning a bit. AppyScore demonstrated a negative predictive value of 83% in the old phase III study, which was well below expectations. [AspenBio shares tanked when the data were announced in January 2009.]

Negative predictive value (NPV) measures AppyScore's ability to accurately determine if a patient isn't suffering from appendicitis (and therefore can be sent home from the emergency room safely.) This is the primary endpoint of the study and the most important clinical measure of AppyScore's utility in the emergency department.

When AspenBio loosened the test's sensitivity in a post-hoc analysis of the initial phase III study, the negative predictive value rose to 89%. When AspenBio looked at data combining AppyScore and a standard test measuring white blood cell counts, the NPV rose to 93% (or 98% with loosened sensitivity.)

I'm throwing out a lot of NPV values here, but they're important to keep in mind as a gauge for what constitutes positive data from the new phase III study.

AspenBio says the new study was conducted with more rigor. It deployed the test at academic medical centers (instead of community hospitals) which should improve data collection and prevent patients from being lost during follow-up. The new study should have more patient data to analyze and is also using a lower sensitivity for the NPV analysis, which should improve results.

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