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Biotech Stock Mailbag: Antares Pharma, NewLink, Celgene

I just came back from the ASCO annual meeting where Bristol-Myers Squibb (BMY), Merck (MRK) and Roche (RHHBY) presented a lot of astounding clinical data on their respective anti-PD1/PDL-1 therapies. This is the positive direction in which the cancer immunotherapy field is headed. By comparison, cancer vaccine developers are driving into a dead end.

Back to NewLink and its pancreatic cancer vaccine known as HyperAcute Pancreaa, or algenpantucel-L. Results from an interim analysis of an ongoing phase III study are expected soon. The official guidance is mid-year.

This interim analysis is fundamentally meaningless. At best, it's another biotech catalyst for biotech traders to trade around.

The most likely outcome of the interim analysis -- to be conducted after half of the expected number of deaths have occurred -- will be a determination to continue the study with final results ready next year. The bar to stop the study early for efficacy is really high -- estimated at a 45% improvement in overall survival for HyperAcute Pancreas relative to the control arm, according to NewLink.

Notably, NewLink is not conducting a futility analysis concurrent with the early look at overall survival. A futility analysis determines whether an experimental drug is unlikely to confer a benefit relative to control.

In other words, NewLink only wants to know if HyperAcute Pancreas works so well that victory can be declared early. The company doesn't want to know -- and will not learn -- if the vaccine has no chance of succeeding.

Unfortunately, this half-blind approach to clinical trials is standard operating procedure for cancer vaccine developers.

Let's check out Celgene's (CELG - Get Report) stock performance so far this year. CELG Chart CELG data by YCharts

As of Thursday, Celgene shares are up 51% for the year, tops among the large-cap biotech stocks. Biogen Idec (BIIB) (+45%) and Gilead Sciences (GILD) (+40%) are second and third, respectively.

One second, allow me to reach around and pat myself on the back for predicting Celgene's outperformance. Six months into the year, I'm right. Yippee!

MM020 is a large and very important phase III study seeking to establish Celgene's Revlimid as the preferred front-line treatment for multiple myeloma. Celgene will use data from the MM020 study to seek an expansion of the U.S. and European labels to include front-line and maintenance use of Revlimid in multiple myeloma.

Celgene is expected to announce top-line results from MM020 between now and September, with more detailed data presented in December at the American Society of Hematology annual meeting.

Bernstein analyst Geoff Porges described investor expectation for MM-020 results in a recent investor note:

MM020 Announcement Still a Key Catalyst. One of the most important questions for investors remains the outlook for the approaching MM-020 study. Celgene's management suggests that the expectations for the PFS outcome of the trial are now in the 30 months (active arm/maintenance Revlimid) vs. 24 months (MPT arm) range; we think the Revlimid maintenance arm PFS will not be shorter 30 months, but the MPT arm could be several months shorter than this 24 months hurdle. Celgene suggested that the initial analysis of PFS will have between 20 and 30% of OS events accumulated, and they expect at best a weak trend towards an improvement in OS at this initial analysis. They certainly do not expect any negative incremental effect of Revlimid on Second Primary Malignancy (SPM) events in this study, and they question whether such a result might significantly reduce the implied importance of the Overall Survival endpoint.

Celgene's long-term guidance of $12 billion-plus in revenue in 2017 -- half of which will come from Revlimid -- is tied to positive MM020 data.

-- 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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