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Biotech Stock Mailbag: Agenus, Aegerion, Ariad

BOSTON ( TheStreet) -- An email from Steven B. about Agenus (AGEN - Get Report) kicks off this week's Biotech Stock Mailbag:

I was looking at Agenus. I know you have been negative in the past. Any change of opinion with recent developments?

Agenus is awful. The company needed a temporary spike in its stock price this week so it could go out and raise some quick cash. On Tuesday, Agenus issued a press release touting "follow on" results from a mid-stage study of its brain cancer vaccine. Except these new drug data were actually stale, having been previously reported by the company in May.

No matter. Some investors were fooled and bid up Agenus shares 30%-plus intraday Tuesday. After Tuesday's close, Agenus rushed out a quickie stock offering priced at $3 per share (including one-third warrant coverage) and raising $10 million.

Nicely played, Agenus. The bloody mess in the corner is what remains of your credibility, but no matter, cash raised. Until next time.

Meantime, Seeking Alpha contributor Larry Smith hails Agenus' brain cancer vaccine results as "extremely impressive." Let's unpack this claim:

The phase II study enrolled 46 patients with newly diagnosed glioblastoma multiforme treated with Prophage (that's Agenus' cancer vaccine) plus the current standard of care -- radiation therapy plus the drug temozolomide.

Analysis of the study data showed a median overall survival of 23.3 months, according to Agenus on Tuesday and last May. There is no comparator arm in this study, which means drawing any conclusion about a potential survival advantage for Prophage is impossible.

No matter, because Agenus decides to compare Prophage's survival data with a much larger study of newly diagnosed GBM patients published in the New England Journal of Medicine in 2005. This so-called "Stupp study" showed a median overall survival of 14.6 months for newly diagnosed GBM patients treated with radiation and temozolomide, thereby establishing the current standard of care.

Prophage's median overall survival of 23.3 months is much longer than 14.6 months reported for the current standard of care, so therefore Prophage must be working.


The problem with comparing data across different clinical trials is that patients' baseline characteristics are different. That is true in this case.
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