This Day On The Street
Continue to site
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

Biotech Stock Mailbag: Vical, Sangamo, Spectrum Pharma

Vical's phase III study excludes melanoma patients with cancer that spread to their brain or liver, requires patients have normal LDH, good performance status and be chemotherapy naive. Melanoma patients with these baseline characteristics are relatively healthy.

This low-bar inclusion criteria for the Allovectin study, more than anything, explains why Vical has been forced to delay results. Once upon a time, Vical was supposed to have data from this study in mid-2011, then it was delayed into 2012 and now 2013. The assumptions made by Vical to design the study were wrong.

Vical bulls say: The unexpected longevity of the study means Allovectin works! The drug must be helping melanoma patients live a really long time.

No, what's happening is that all the patients in the study -- the Allovectin and the control arm patients -- are living a really long time. And when all patients live longer, it becomes exceedingly difficult for a drug to demonstrate a statistically significant improvement in overall survival.

I'm not going to dive back into the Allovectin phase II study results here but I've discussed them in the past. I don't see anything in the phase II data -- or Vical's previous phase III study with a lower dose of Allovectin that failed -- that gives me confidence in the ongoing trial.

Vical bulls disagree, of course. PropThink's Dee Kotak is a Vical bull so check out his argument for why the Allovectin study will succeed.

Two additional points:

1. If Vical manages to beat the odds and announce a positive survival benefit from the Allovectin study, the first question I'd ask is about subsequent therapy. Two melanoma drugs with proven survival benefits -- Roche's (RHHBY) Zelboraf and Bristol-Myers Squibb's (BMY) Yervoy -- have both been approved during the conduct of the Allovectin study. It's likely that a good number of patients in Vical's study received treatment with Zelboraf or Yervoy after Allovectin. That's problematic if treatment with either Zelboraf or Yervoy isn't balanced across both arms of the study.

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
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!
SYM TRADE IT LAST %CHG
SPPI $6.10 0.00%
SGMO $14.70 0.00%
VICL $1.00 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs