This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

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 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."
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CORT $3.40 -1.20%
ONTY $1.06 0.48%
OSIR $6.32 1.40%
SNY $38.67 -1.40%
REGN $366.58 -6.10%


Chart of I:DJI
DOW 15,905.08 -121.97 -0.76%
S&P 500 1,843.06 -10.38 -0.56%
NASDAQ 4,252.5020 -31.2510 -0.73%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs