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Biotech Stock Mailbag: InterMune, Ohr Pharma, Ampio

InterMune is expected to announce top-line results early in the second quarter.

After that, InterMune will present the full data from Ascend at the same ATS meeting where BI will present the nintedanib data. With all caveats about cross-trial comparisons recognized, we'll be able to judge which drug looks better. Neither of the drugs will work forever, so assume IPF patients will likely receive both at some point.

Pankaj A. writes:

I would like to know your thoughts on Ohr Pharmaceuticals (OHRP). Do you think valuation is justified?

I'm not a fan of Ohr because I don't believe squalamine eye drops will be effective in treating "back of the eye" diseases like wet age-related macular degeneration (wet AMD).

A bit of history: Squalamine is an old anti-angiogenic drug first developed by Genaera as an intravenous treatment for wet AMD. Studies showed the drug to be inferior to intravitreal (into the eye) injections like Roche's Lucentis (and now Regeneron Pharma's (REGN) Eylea.) Genaera eventually went out of business. In 2009, Ohr acquired squalamine for $200,000 and reformulated the drug into an eye drop.

Ohr has been developing the squalamine eye drop ever since, claiming to have data demonstrating the drug can reach the retina where it's needed to block leaky blood vessels which cause the vision loss in patients with wet AMD.

Hmmm. Color me skeptical. If an anti-angiogenic eye drop were so easy to formulate and with billions of dollars in sales at stake, you'd think research powerhouses like Roche and Regeneron would have figured it out already or gobbled up Ohr. Neither has happened.

Medicinal eye drops are very effective for diseases that affect the front of the eye, but they have a difficult time getting to the back of the eye. Generally speaking, fluid flows from the back of the eye to the front, so an eye drop medicine needs to swim "upstream" to reach the back of the eye. Tough to do.

Ohr is not the first company to try. GlaxoSmithKline (GSK) formulated its anti-angiogenic drug Votrient (pazopanib) into an eye drop and conducted a large phase II study in AMD patients using Lucentis and placebos as comparators.

The study failed. Improvements in visual acuity for Votrient eye drops were lackluster relative to Lucentis. Votrient eye drops were also unable to reduce the frequency of Lucentis injections by 50% -- a key criteria of success for Glaxo. As a result of the negative phase II study, Glaxo dropped the development of a Votrient eye drops.

The negative results from the Votrient AMD study bode poorly for Ohr's squalamine. Votrient is a real drug, approved for kidney cancer and sarcoma. Squalamine's clinical history is unimpressive by comparison.

Ohr's ongoing phase II study enrolls 120 wet AMD patients treated at Day 1 with Lucentis. The patients are then randomized to receive either squalamine eye drops or a placebo for nine months. Lucentis will be administered to patients on an as-needed basis.

The study's primary endpoint is 1) to determine if squalamine eye drops can reduce the number of Lucentis injections required; 2) delay the time to Lucentis pretreatment; and 3) visual acuity gains. The study is powered to detect a 1.5 Lucentis injection difference between the arms.

Interim data are expected in the second quarter.

Let's assume squalamine does reduce Lucentis injections by 1.5 over nine months. That implies a 2-injection reduction over a year. Is that clinically meaningful?

The most conservative dosing schedule on Lucentis' label calls for one injection per month, or 12 per year. In the real world, AMD patients are injected with Lucentis about eight times in the first year and five times in the second year, according to Genentech.

I'm sure Ohr will claim 10.5 injection of Lucentis per year instead of 12 (or 6.5 injections instead of 8) is a significant reduction in frequency, but it wouldn't have passed muster with Glaxo in the Votrient AMD study.

Ohr shares traded flat for the second half of 2013 but have doubled in value since the middle of January, mainly due to momentum investors and the bubble market for low volume, highly speculative biotech penny stocks.

The stock has been especially active this week because of Brean Capital analyst Jon Aschoff hyping a Feb. 19 presentation at the Macular Society Meeting in which a researcher is apparently presenting squalamine treatment data on five patients diagnosed with proliferative diabetic retinopathy. The title of the presentation includes the word "regression," which has Aschoff very excited.

Aschoff is the only analyst covering Ohr, which had $6 million in the bank as of June 30. He probably doesn't need to try so hard to get the banking business.

Mark O. asks:

Awhile ago, you criticized Ampio Pharmaceuticals (AMPE) for not offering any details of their drug for knee arthritis. But Ampio just published the study and I have not heard anything from you on the subject. Did the company provide the level of information that makes you change your mind about them? Thanks for your time and consideration.

I wrote that column last November. And yes, I did lay into Ampio for touting the pain-relief efficacy of its osteoarthritis drug Ampion in multiple press releases but refusing to provide actual clinical data to back up their claims.

On Feb. 4, the Ampion "Spring" study was published in PLOS One, the open-access science journal. The PLOS One paper answers some of my questions about Ampion but raises others. Let's go through it.

It's wise to start with a look at the authors. In this case, the Spring study paper was written by Ampio employees, Chief Scientific Officer David Bar-Or and Chief Regulatory Affairs Officer Vaughn Clift. They're hardly objective. Two of the Spring study's non-Ampio authors, Drs. Matt Phillips and Brian McGrath, own stock or stock options in Ampio.

On Aug. 14, Ampio issued a press release announcing the Ampion study achieved its primary endpoint [reduction in knee pain] with "high statistical significance." Both the 4 ml and 10 ml doses of Ampion provided osteoarthritis patients with pain relief but there was no "significant difference" between the efficacy of the two Ampion doses, the company said.

Ampio, in its Aug. 14 press release also said, "Patients receiving Ampion achieved a significantly greater reduction in pain (WOMAC A) from baseline to 12 weeks compared to saline vehicle control (p=0.0038)."

Here's how the results of the study are described in the PLOS One paper:

LMWF-5A [Ampion] resulted in a statistically significant improvement in pain as compared to vehicle control (-0.93 vs -0.72, respectively). An injection volume effect was not observed (p = 0.64). The estimated difference from control was -0.25 (95% CI: 20.08 20.41), p= 0.004.

According to my calculator, the difference in pain relief between -0.93 (Ampion) and the study control (-0.72) is -0.21, not -0.25.

I don't know if the difference between -0.25 and -0.21 changes the outcome of the Ampion study, but the credibility of the published paper falls when an obvious math error makes it through the data analysis, writing and review processes. [See my comments about the financial conflicts of study authors above.]

The lack of an "injection volume effect" refers to there being no difference in pain reduction between the Ampion 4 ml and 10 ml doses. Ampio claims a win on the Spring study primary endpoint by pooling data from the 4 ml and 10 ml doses of Ampion compared against placebo. Was that allowed, per the study's protocol and statistical analysis plan?

Not clear.

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