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Biotech Stock Mailbag: Orexigen Therapeutics

Stocks in this article: OREX VVUS ARIA CVM AVNR DSCO

Do the right thing, Orexigen CEO Michael Narachi, and let investors read the complete response letter verbatim in the spirit of full transparency and accountability.

You'll be a hero if you do.

Jim Johnson emails, " Cel-Sci (CVM) announced that it started the Phase III clinical trial for Multikine. Is it me or is Cel-Sci the expert in taking old information and/or already-announced information, publishing it to the wires and reeling in new bag holders on small price-per-share jumps? Is this company for real or is this just another PR tactic?"

You're being too harsh on Cel-Sci! I think it's great that the company has taken investors on an around-the-world tour as it issues press releases on each and every country allowing the Multikine phase III study to proceed. Personally, I've used the Mulitkine press releases to help my kids learn geography: Russia, Ukraine, Taiwan, Hungary, Mississipi (a state, not a country, I know), India.

It takes a village to raise a child but a mini-U.N. to conduct a Multikine phase III study.

The important thing missing from all these Cel-Sci press releases is an announcement of the first patient enrolled in the Multikine study. Where are the actual patients eager for treatment with Multikine?

Cel-Sci plans to enroll 880 patients in the phase III study -- an ambitious enrollment goal, for a drug with a paucity of phase II data. The Multikine data that do exist shouldn't inspire much confidence at all in the drug's efficacy. I wrote about the multiple problems and shortcomings of the Multikine phase II study last year, in two parts.

If you're interested in following what will likely be the very slow progress of the Multikine phase III study, I'd watch for the number of U.S. hospitals open to enrollment. Right now, that list stands at one -- North Mississippi Health Services of Tupelo, Miss., according to A diminutive roster of U.S. enrolling sites is a red flag -- indicative of underwhelming interest in Multikine amongst U.S. doctors.

Cel-Sci plans to seek approval of the drug here and the FDA will want to see a significant amount of data from U.S. patients. That's assuming the study is positive, which I believe is unlikely. Data from centers in Eastern Europe or other less-developed parts of the world isn't always reliable and can lead to problems.

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