Biotech Stock Mailbag: Fibrocell Science
LaViv does appear to work. The cell therapy was reviewed in 2009 by an FDA advisory committee, which voted 11-3 that laViv demonstrated efficacy in the proposed indication. The same panel, however, voted 6-8 against laViv's safety, mainly due to concerns about uncontrolled cell growth or tumor formation resulting from the injection of these growth-happy cells under a patient's skin. A single patient in the laViv's phase III studies did develop basal cell carcinoma at the laViv injection site that the investigator deemed possibly related to the therapy.
FDA rejected laViv in December 2009, telling Fibrocell that it could resubmit for approval after first conducting a safety study to determine the risk that laViv might cause uncontrolled cell growth or tumors.
Fibrocell conducted this safety study and said the results came back benign in laViv's favor. The new safety data were resubmitted to FDA at the end of last year and accepted by FDA for review. The FDA is expected to issue its second approval decision for laViv on June 22.
Dendreon's (DNDN) Provenge is also an autologous, or personalized, cellular therapy, so there is precedence for this type of FDA approval. [The same division within FDA is in charge of reviewing both laViv and Provenge.] Provenge, of course, is an immune-based prostate cancer therapy and because it involves the immune system and not proliferative cells, doesn't carry the risk of tumor formation. laViv is seeking approval to smooth wrinkles -- not exactly a dire, or life-threatening condition. The risk-reward balance is skewed much more on the risk side with laViv.I'll call the FDA approval decision on laViv a toss up. Fibrocell is a penny stock that trades on the bulletin boards, so I'd expect the stock to kick higher on laViv approval. [Fibrocell shares, at $1.22 Thursday, have already more than doubled in value this year.] Fibrocell has no marketing partner for laViv and suffers from a lack of cash. At the beginning of May, Fibrocell had $2.2 million in the bank and $1 million in debt, burning through $1 million a month. If laViv is approved, Fibrocell will need to raise a lot of money or find a partner to get this cell therapy onto the market.
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