This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
TheStreet Open House

Biotech Stock Mailbag: Osiris, Arena, Ampio

Stocks in this article: OSIR ARNA VVUS AMPE

Arena's current $2 billion valuation is hard to justify given lorcaserin's mediocre weight-loss capability. I predict a strong launch of the drug fueled by extensive media publicity and word of mouth but sales will fizzle relatively quickly as the obese become disappointed and disillusioned about shelling out $100 or more per month for a pill that doesn't help them shed significant pounds or keep the weight off very long.

In case you think I'm biased against Arena only, I feel the same way about Vivus' Qnexa.

"LisaInBuffalo" writes, "I’m looking forward to your Mailbag column tomorrow and I have a small favor to ask. Could you please not be too harsh on Arena? Please! Please! We are having so much fun! I know that some of the Areniac’s are rude and inconsiderate (read:crazy) but most of us are pretty normal and cool like me. I was with you during your live blog of the Arena AdCom and you thought it would be a 23-0 vote and you know the FDA was very positive. I know that you think the drug is not the most efficacious but when it comes to obesity it’s hard for someone like you or me to understand. You look like a pretty fit guy and I’m 5’8 and 125 lbs. and have never had a weight problem, but I know many people who do.

"It is so hard for many overweight and obese people to lose weight through diet and exercise alone. Even if Lorcaserin helps them a little or moderately or in the case of top responders, significantly, it can give them the motivation they need to keep dieting and exercising. If dieting worked, then nobody would be overweight. Again, it’s hard for people like you and I to understand the predicament of the obese. Of a person who just looks at food and gains weight- they need help and Lorcaserin can help a lot of people. Not everyone, but no drug does that. Even Topamax is weight neutral for many people, but for those who do respond it works well. So, in closing, please Adam, let the party continue just a few more days. Keep up the good work. We all appreciate it."

Ampio Pharmaceuticals (AMPE - Get Report) update: Setback. FDA is requiring the company to conduct two new phase III clinical trials of its premature ejaculation drug Zertane in order to seek U.S. approval, the company announced Thursday.

As I noted in April, Ampio has been misleading investors about Zertane, claiming it had previously conducted a positive phase III study of the drug, which is simply a mint-flavored dissolvable tablet containing a low dose of a generic painkiller. In fact, this prior phase III study was actually a re-analysis of two shortened and failed studies conducted by Biovail, which ultimately gave up on Zertane.

Ampio had been hoping to convince FDA to allow the use of the old Zertane data to accelerate an approval filing in the U.S. but regulators here refused, telling the company instead that it must conduct two new phase III trials.

On a related note, Ampio management in late May sent shareholders a letter complaining about "rampant short selling" that is driving down the price of the company's stock, despite all its good works. In the letter (a copy of which I obtained), Ampio CEO Michael Macaluso asks shareholders to contact their brokers to request they stop lending out Ampio shares for short sales.

When management starts fixating on short sellers, trouble is usually not too far behind. We see evidence of that Thursday with the Zertane setback.

--Written by Adam Feuerstein in Boston.



>To contact the writer of this article, click here: Adam Feuerstein.

>To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein.

>To submit a news tip, send an email to: tips@thestreet.com.

5 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs