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Biotech Stock Mailbag: NuPathe

Jeff S. emails, "Northwest Biotherapeutics(NWBO.OB) looks to be lifting their profile following survival mode through the recession. All the chips seem to be on the table, banking on DCVax-Brain achieving FDA clearance following reconfigured phase II for gliobastoma multiforme. Other news seems superficial to me, with only this fact mattering. But certain metrics show the trial is enrolling well. Is this a realistic jump (over phase III)? And if so, could a long-term investor see tempered returns in the next 24 months?"

Let me start on Northwest Biotherapeutics by quoting myself from a Feb. 18 Mailbag, which I wrote after I saw the company present at the BIO CEO Conference in New York.

"I saw some bad stuff Monday and Tuesday. Topping the garbage list was Northwest Biotherapeutics -- easily the worst and most laughable presentation I saw at the conference. I almost fell off my chair when Northwest chief Linda Powers showed slides with Kaplan-Meyer survival curves demonstrating a "survival benefit" for the company's DCVax cancer immunotherapy over historical data culled from previously published clinical studies. Heck, Powers even attached a statistically significant p value to this pseudo-scientific nonsense. The entire Northwest presentation was appalling."

I hope my contempt for Northwest Biotherapeutics is clear. Just like you wouldn't invest in a company that manipulates accounting rules to make its financial results look better than they really are, you also shouldn't invest in a drug company that abuses biostatistics to make its cancer immunotherapy (or any drug) appear more effective than it is. The latter is what Northwest Biotherapeutics is doing with data from two phase I studies of DCVax-Brain which enrolled 29 patients from the same hospital.

You cannot make a survival benefit claim from a single-arm study, i.e., a study without a comparator arm! This is an iron-clad rule. No exceptions.

Be very skeptical of any company trying to convince you that its experimental drug is helping patient live longer based on a single-arm study. Be skeptical, insulted and angry when a company serves up this B.S. claim with a statistically significant p value.

Via Twitter, @ssekhar asks, "Hey Adam, any thoughts on potential for a YM BioSciences(YMI) partnership with Big Pharma? Too risky until their phase II reads out?"

Agreed. I'll be shocked if YM lands a development/marketing partner for its myelofibrosis drug CYT387 until after data from the ongoing phase II study is presented at the American Society of Hematology annual meeting in December. These data should help clarify the controversy over '387's ability to correct anemia in myelofibrosis patients, as well as provide more color on the drug's biggest side effect risk, peripheral neuropathy.

Given the big run-up in YM's stock price leading into the ASCO annual meeting earlier this month, I was expecting the stock to sell off some after the meeting ended. I wasn't expecting YM shares to lose nearly all the gains made in the pre-ASCO run, however, which is what's happened. [A lousy market overall hasn't helped.]
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