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Biotech Stock Mailbag: Vical, Hep C Drugs

The assumption of a 4% response rate in the control arm comes from a failed phase III study of Genta's (GNTA) Genasense compared to DTIC. However, patients enrolled in the Genasense/DTIC study were sicker and had more negative baseline prognostic factors. This makes it likely that the control arm in the Allovectin study is going to perform better than Vical expected, as enrollment is being restricted to "less sick" melanoma patients like it was in the phase II study.

If the temozolomide/DTIC arm of the phase III study outperforms, so too must the Allovectin arm, which seems very unlikely given the previous data.

A couple more notes:

The Allovectin study is being run under an SPA that allows for a durable response rate primary endpoint, but since the study started two melanoma drugs (Bristol's Yervoy and Roche's (RHHBY) Zelboraf) were both approved based on clinical trials that demonstrated an improvement in overall survival. Even Vical now acknowledges that Allovectin probably must also demonstrate a survival benefit in order to be approved.

Once upon a time, Vical ran a phase III study of Allovectin in combination with DTIC that failed. Granted, this study used a lower dose of Allovectin but still, failure is a failure.

"PHavna84" writes, "With all the attention given to hepatitis C drug stocks today, I still don't understand the differences with these drugs and what makes one drug better than the other. Can you explain?"

Thanks for the great question. I write about these new hepatitis C drugs all the time but sometimes neglect to explain, for example, why investors today are more deeply in love with the so-called "nucs" than "protease inhibitors." Let me try to explain the differences between these classes of antiviral drugs as simply as possible.

First, let's step back and remind everyone that all of these newly approved and experimental hepatitis C drugs act directly against the hepatitis C virus, meaning they interfere with or block enzymes that the virus requires to copy itself or make a comfortable home in a patient's cells. You'll often hear these drugs referred to as "direct-acting antivirals, or DAAs. All of these drugs are pills.

It's not precisely known how interferon and ribavirin, the previous standard therapy for hepatitis C, work against the virus but it's believed the two drugs do help stimulate the body's immune system to recognize and attack the virus. In other words, the drugs work indirectly, at least partly. Interferon needs to be injected once a week.
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