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Biotech Stock Mailbag: NeoStem, MannKind, Inovio


None of the Afrezza data have been presented at a medical meeting or published. All we've got are MannKind press releases and a weird FAQ filed with the SEC, which means the mediocre study results we're seeing are the best Afrezza is ever going to look. When the FDA starts ripping the Afrezza data apart, who knows what happens? I won't be surprised if the agency finds enough bad stuff to conclude one or both of the studies failed and that the product is not approvable.

There's certainly precedent for an Afrezza rejection. Two, actually. And in both instances, MannKind was not open and honest with investors. To me, it's risky to have any confidence in MannKind management or the Afrezza data.

Could I be wrong about predicting an FDA rejection? Absolutely. The FDA acquiesced on Vanda Pharma (VNDA) so it's entirely possible that Afrezza gets a similar softball review and is approved.

Last August, I gave Afrezza 50-50 odds for approval. So, let's say I'm at 60-40 for rejection today.

Must Read: The Twitterverse's Biotech Stock Picks for 2014

The more confident bear thesis on MannKind is still Afrezza being approved but ending up a total commercial flop.



Prepare yourself for a batshit-crazy email on Inovio Pharma (INO - Get Report). Daren R. objects to last week's Mailbag:

Dear   Adam      I must  say    your recent article  about the company  Inovio  pharm   is  a little  bit condrecting    didn't you just say a few weeks ago   the company  stock was up over 400 %  in the year of 2013,    you  honestly sound like a  person who is shorting the stock and  trying to put the fear of god  into people so they will sell their shares.    I have to ask you   please prove to me  how you feel this  company  which was founded  in 2009  is a 34 year old company.   by all means  please prove to me  how it was  created in 1979  and has had  numerous failed attempts of their  vaccines and  immunetherapy,   Wow   I used to like   Jim Cramer  but if he has  some one like you  working for him   I  think I have  to stop watching him and  honestly   I really hope its just a matter of time  when the SEC  knocks on your door.   Please remember  when you were growing up  did  your mother  ever tell you  if you don't have anything nice to say about someone or a company   then really  you need to show some respect and keep quiet ,   for your sake  I really hope that  some one in your family  that gets sick from cancer or aids  and   you come calling for help with Inovio  and they find out its you and deny you healthcare treatment  because  you are skeptical    wow  what does  Jim Cramer  see in you any way.   you know  I bet you not once have you ever had the chance to have an interview  with  the CEO  Dr Kim of Inovio   why don't you do your self  a favor  and speak with the man before  you start spewing out lies only so your buddys can short  the stock   gee  can you do me a favor   will you send me an email  so I know to hold off and buy when I can get them cheaper,    Well  for what I have been reading about you  it looks like you have been wrong a few times about your picks on stocks.    well  like the guys all say on the  yahoo message board  like clock work  as so a stock climbs you have to bad mouth it.     do your self a favor  and have an interview  with the  board of directors of Inovio  have of them are from a little pharmecutical   company called  MERCK    so  please do your home work  because when this stock dwarfs   has a  great  year and dwarfing  2013   in 2014     be careful   you may have to eat a  big plate of  crow  or you may wake up with egg on your face   some morning.   gees  JIM CRAMER  HAS TO PICK A BETTER   person then you   but please buy all means please in your next article please explain to us  how  this company is  34 years old   I really would like to know   and if you are  and you can prove me wrong  I will gladly be the gentleman I am and apologize  to you .   thanks  Topgun    just because I am the best at what I do !

What to say? It's easy to mock Daren for his incoherence, his rambling prose and almost total lack of punctuation. Done.

Gerald H. is also upset with my Inovio skepticism.

Your recent comments concerning Inovio are invalid. Thirty years ago, Inovio under a different name was working on solid tumors using electroporation to deliver bleomycin to the tumor. At that time and up until 2009 when Dr. Kim took over, insiders including the President owned very little if any common stock.  Also, up until Dr. Kim's arrival, no work was done on vaccines. Your analysis of Inovio should start when Dr. Kim took over. All events and circumstances before Kim are not relevant to the analysis of Inovio. The Roche deal and Mr. Collins insider common stock purchase are very positive signs that support Dr. Kim's vision. 

I fundamentally disagree with you, Gerald. I don't buy the argument that there's a legitimate pre- and post-Kim Inovio.

Inovio was focused on electroporation before Kim arrived and is still doing so today. The technique, more than 30 years old, involves using electricity to make cell walls more porous to enhance the delivery of drugs. Yet, Inovio has never demonstrated the benefit of electroporation. Gerald mentions the work done by Inovio with the chemotherapy drug bleomycin. What he omits is Inovio, in 2007, was forced to halt two phase III studies of bleomycin delivered via electroporation in head and neck cancer patients. Independent safety monitors found patients were dying at a faster rate in the electroporation/bleomycin arm compared to patients treated with surgery.

Nothing in Inovio's pipeline has panned out. There's the HIV drug pictovir, which was shut down in 2008, and more recently, the hepatitis C drug ChronVac-C, which failed a phase II study last April.

Gerald says Inovio is all about DNA vaccines today, but ChronVac-C was a DNA vaccine. Failed.

Then there are the Inovio pipeline products which seem to on the shelf or forgotten. I'm referring to the flu and pandemic flu vaccines VGX-3400 and VGX-3510 which haven't advanced since 2011. VG-1027 was hailed as a therapy for rheumatoid arthritis and diabetes but work on it has been suspended since 2011. PennVax for HIV seems to be going nowhere and a leukemia vaccine study is suspended.

Remind me again how the arrival of Kim as CEO was a positive sign?

DNA vaccines and dendritic vaccines share many similarities in the way they're designed to prime a patient's immune system to identify and attack diseased cells. The latter have not lived up to their promise, and I remain highly skeptical that DNA vaccines will prove to be any more effective.

One more observation about Inovio for those who point to the Roche (ROG) partnership as validation of DNA vaccines and electroporation: I will remind you that Inovio used to have significant drug development partnerships with Wyeth and Merck (MRK). The former was terminated in 2009; the latter is technically still in place but essentially dead.

Also in last Friday's Mailbag, I mentioned a preference for Exelixis (EXEL) over Ariad Pharmaceuticals (ARIA - Get Report) in 2014. Dan G. says I made a poor choice:

Good morning baldie. Exelixis vs. Aria. Due to the fact that you are clueless, I am moving my money from Exelixis to Aria. I have no doubt Aria will do better short and long term.

Not so far, Dan.

EXEL Chart
EXEL data by YCharts

I'll give this week's last word to Sam. H.

"You are a jerk..."

Thanks, Sam. Love you, too.

-- Reported by Adam Feuerstein in Boston.  

Follow Adam Feuerstein on Twitter.

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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