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Biotech Stock Mailbag: Clinical Data, Mannkind and Thanks!

Stocks in this article: CLDA MNKD DEPO DCTH PFE ABT

"There's always risk with FDA decisions but with vilazadone we have a drug acting via two known, well-understood mechanisms of action in depression, a good tolerability profile and the absence of sexual side effects," Wade says in an email he sent me after reading my column (which mentioned his bullish stance on the stock.) "Clinical Data has had two positive Phase III studies and no advisory panel. We're optimistic on Clinical Data and vilazodone's chances."

Wade took issue with some of the criticisms of vilazodone expressed by my bearish buy-side analyst source. He believes Clinical Data had conversations with FDA about using the so-called MADRS depression scale as the primary endpoint in the vilazodone clinical trials and that the agency will have no concerns about MADRS over the similar HAM-D depression scale.

Wade also downplays vilazodone's inability to significantly improve remission rates. He contends that achieving statistically significant improvements in remission rates in short, eight-week studies is difficult. "To see any effect at all is an interesting observation."

Does vilazodone causes fewer sexual side effects? If true (and it shows up in the FDA-approved label), vilazodone would have a significant marketing advantage over some of the other currently marketed antidepressants.

Wade and the other Clinical Data bulls point to data from the two phase III studies that showed vilazodone impact on sexual function was similar to placebo as measured by validated scales. All true, but in the second phase III study, decreased libido was also reported in 3.7% of vilazodone patients compared to 0.2% of placebo patients. In males, the rate of decreased libido was 4.7%.

Loss of libido sounds like sexual dysfunction and is worth mentioning, too.

Meantime, a hedge fund manager who has a large long position in Clinical Data (stock and options) emailed me to express his confidence in vilazodone. While he asked not to be named, this fund manager gives vilazodone 95% odds for an FDA approval. He's a big believer in Randal Kirk, Clinical Data's chairman, because of his past success founding and selling New River Pharmaceuticals to Shire (SHPGY).

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