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Biotech Stock Mailbag: Corcept Therapeutics, Reader Retorts

Corcept's phase III study demonstrated Korlym's efficacy but safety issues and concerns -- low potassium levels, adrenal insufficiency, endometriosis in women and possible heart rhythm abnormalities -- will likely keep the drug from being approved on a first pass.

If you're curious, I'm not alone in predicting Korlym's rejection next week. Forty-seven percent of contestants in my 2012 FDA Drug Approval Contest agreed with my assessment compared to 42% who believe Korlym will be approved. The remaining 10% predict a delay in an FDA decision.

Oncothyreon (ONTY) bull @given2tweet challenges me (an Oncothyreon bear) to refute some facts/assertions that he believes points to a positive outcome for the ongoing phase III study of Stimuvax in non-small cell lung cancer. Merck KGaA, which licensed Stimuvax from Oncothyreon, is running the lung cancer trial. Results from a second interim analysis are expected this quarter.

"Four new Stimuvax trials initiated in last four months -- breast, colorectal, colon and rectal," says @given2tweet. "Why would Merck KGaA wait five-plus years to launch four phase IIs? Why didn't they do this 2007-2010? Further, Merck hired a cost-slashing CFO in 2011. He killed a dozen drugs in the pipeline last year. Why would he green light four phase IIs when we are months away from interim data and a year from top line?"

Is Merck obligated to invest in further Stimuvax-related R&D, per the terms of its license with Oncothyreon? I don't know, but it seems as reasonable an assumption to make as implying that investment in new Stimuvax studies today suggests that the lung cancer phase III trial is working.

Pfizer (PFE) paid an upfront fee of $225 million to Medivation (MDVN) to gain control of the latter's Alzheimer's drug Dimebon when it only had phase II data to examine. Pfizer then investing tens of millions of dollars more in several large phase III trials. Dimebon ultimately failed rather spectacularly, meaning Pfizer flushed a ton of money down the toilet.

My point is that large pharmaceutical companies take risks, start trials, invest big money all the time in experimental drugs where the ultimate outcome is uncertain. By your logic, Dimebon should have worked because Pfizer invested way more money in the drug than German Merck is doing with Stimuvax.

I checked ClinicalTrials.gov and I can't find four new phase II studies of Stimuvax. I found a rectal cancer study begun Jan. 6, 2012 and a prostate cancer study started Nov. 3, 2011. Both studies are small with exploratory immunological response primary endpoints.

Next, @given2tweets asks, "Why is Stimuvax phase III trial taking so long with a known enrollment curve? Is there any point where the bears will admit that something is odd? If the trial hasn't reached top line till 2015 would you conclude maybe the drug works? Please tell us if this is ever a useful indicator."

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