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Biotech Stock Mailbag: Synta, Zogenix, Sarepta, Amarin

Stocks in this article: SNTAAMRNRPRXOMTHZGNXSRPT

Many investors have eyed the previously presented ganetespib data with a good amount of skepticism, in part because claims the drug would work better in certain targeted subsets of lung cancer patients (elevated LDH or KRAS mutants) don't appear to have panned out. Synta is now positioning ganetespib as a more conventional add-on to chemotherapy for a broader swath of patients. Whether Synta is just throwing a Hail Mary or there's legitimate reason for optimism with ganetespib won't be decided for awhile, but the ASCO meeting should give us some additional clues.

I don't know the exact reason behind the FDA's delayed approval decision on Zogenix's (ZGNX) painkiller Zohydro (an extended release formulation of hydrocodone that doesn't contain acetaminophen.) I am fairly confident that whenever FDA does get around to deciding Zohydro's fate -- Zogenix said a decision could come this summer -- the news will be bad.

Bottom line: FDA is no longer approving painkillers with abuse potential. Zohydro is abusable, therefore will be rejected.

I agree with the bearish take on Zogenix and Zohydro published last week by Jake King at PropThink.

Excellent decision. Speaking of Sarepta Therapeutics (SRPT), here are my two, new favorite eteplirsen data slides, unveiled by CEO Chris Garabedian during his presentation last week at a healthcare investor conference. He also spoke about them on Thursday's first-quarter conference call.

The first slide, showing studies in which untreated kids with Duchenne muscular dystrophy decline on the six-minute walk test, supports the decline in walk distance recorded by placebo patients in the phase II study.

The second slide shows, for the first time, the eteplirsen data on a per-patient basis. Look at the remarkable consistency in six-minute walk scores.

Sarepta plans to submit additional information on eteplirsen to FDA before the end of May, with the hope that a follow-up meeting to discuss the accelerated approval filing can be scheduled at the end of the second quarter. I'm still expecting FDA to allow Sarepta to file for accelerated approval, which means eteplirsen will be approved.

No. We had two pieces of expected news from Arena Pharmaceuticals (ARNA) in the past week: The rejection of Belviq by European regulators and the completion of the long-delayed DEA scheduling that will finally allow the weight-loss pill to launch next month. The latter did not produce the "mother of all short squeezes" envisioned by the Arena longs because investors shorting (or planning to short) Arena want Belviq to launch. Weak efficacy and questionable heart safety plus big out-of-pocket expense for patients will equal poor Belviq sales.

Omthera Pharmaceuticals' (OMTH) market value ($166 million) is cheap relative to Amarin ($1 billion market value). That's about the most positive thing I can think to say about Omthera. I struggle to be excited about a third, prescription fish-oil pill for lowering trigylcerides. Amarin (AMRN) is having enough troubles selling Vascepa, making it hard to see how Omthera would have any better luck with its Epanova pill.

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