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Investors Overreact to Opexa Finding Scant Interest for Failed Multiple Sclerosis Drug

Opexa should have discontinued Tovaxin based on these poor study results. Instead the company spent the past three years picking apart the data retrospectively to find subsets of patients where Tovaxin performed better.

In January 2011, Opexa announced plans to begin a phase III study of Tovaxin in relapsing-remitting MS. That study was never started. Instead, in November 2011, Opexa shifted gears and decided to conduct a new phase II study of Tovaxin in patients with secondary progressive MS -- a more severe and harder-to-treat form of the disease.

In May 2012, Opexa changed the name of the drug to Tcelna, a ruse to help investors forget about the drug's history of failure.

The phase II study of Tcelna in secondary-progressive MS only started last fall and Opexa doesn't enough cash to complete it.

As Biogen Idec (BIIB) waits to hear from the FDA on the approval of its MS pill BG-12 -- a drug expected to be a commercial blockbuster, German Merck decided the time is right to option a MS vaccine with a long history of failure.

Good luck with that.

-- Reported by Adam Feuerstein in Boston.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.
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