) -- The Biotech Stock Mailbag opens with an email from Paul B.


Any chance of some coverage on Cardium Therapeutics (CXM) ? This was a very low-volume stock until quite recently, and had been trucking along nicely in the $2 range, then all of a sudden on October 14th, immediately following the announcement of GOOD results from a clinical trial, the stock tanked and kept going down. Even though a share offering was in the works, at $1.30, the price has now gone below 70 cents. What ... is going on? Why did the stock tank on good news?


Let me say right upfront that I didn't know anything about Cardium before reading Paul's email, and I've only now taken a cursory look.

The fall in Cardium shares might be related, at least partially, to what looks to me like so-so results from the phase IIb study announced on Oct. 14.

In its press release, Cardium said that 48% of diabetic foot ulcer patients treated once with Excellerate, its wound-healing drug, had complete wound closure after 12 weeks compared with 31% of patients treated with standard of care (the control arm of the study.)

That's a 55% relative improvement for Excellerate over control, but nowhere in the press release does Cardium say this benefit was statistically significant. That's a red flag I'd want explained if I were doing more research into Cardium and this study.

Excellerate is composed of an active drug suspended in what was supposed to be an inactive collagen matrix (think gel.) A potential problem and another red flag, however, is that Cardium says treatment with the collagen matrix alone "contributed substantially" to wound-healing responses in the study.

Cardium either doesn't know, or doesn't say, whether the active drug in Excellerate or the "inactive" gel was mostly responsible for the wound-healing benefit observed in the study i.e. what was the wound closure rate for Excellerate compared to the gel alone? You can take this question one step further by asking about the wound-closure rates for just the active drug component in Excellerate as well.

Cardium plans to move Excellerate into a phase III study following a meeting with the U.S. Food and Drug Administration. I wonder if regulators will ask Cardium to do more phase II work to better define the clinical benefit of Excellerate and its two individual components before proceeding into a pivotal phase III study.

That's just speculation on my part, but again, this is something I'd dig into if, like Paul, I were either invested in Cardium or interested in buying the stock.

It goes without saying that the stock sale with hefty warrant coverage initiated by Cardium the day after announcing the Excellerate data didn't help either.

John B. writes, "

What's your take on GenVec (GNVC) getting orphan status on its cancer drug? I'm new to this. I'm long GenVec and have talked to you before regarding this company, but I have no idea what this means in terms of positive or negative for a company. Is this a good thing? Does this bode well for the drug, or is there some hidden message that I'm missing?


Orphan drug status is an FDA-sanctioned program designed to provide certain regulatory and financial incentives to companies developing drugs for uncommon or rare diseases. The biggest carrot provided is seven-year market exclusivity upon drug approval.

So yes, the granting of orphan drug status for GenVec's pancreatic cancer drug TNFerade is a positive development for the company. However, orphan drug status for TNFerade does


mean anything about the FDA's feelings for the approvability of the drug. In other words, do not assume that orphan drug status means anything when it comes to predicting the outcome of the ongoing phase III study of TNFerade in pancreatic cancer.

Sticking with GenVec, Nick M. writes, "

Do you still stay with your year-ago analysis of GenVec and the company's lead drug TNFerade to fight pancreatic cancer? What about the company's cash position?


It was about a year ago, on Nov. 19, 2008, to be exact, that I wrote about the

first interim analysis

of the phase III TNFerade study in pancreatic cancer. I wasn't particularly encouraged by the survival findings of that analysis, and the market seemed to agree with me because the stock took a big hit.

Since that time, no new data from the study have been presented, so I'm not inclined to change my view. GenVec says the next interim look at data from the TNFerade study is expected in the first quarter of next year.

For those who may not remember the data from the first interim analysis, GenVec was encouraged by the 25% relative risk of death for TNFerade-treated patients compared with patients treated with standard of care. More


to me, however, was that overall survival at 24 months of follow-up favored the standard of care arm (11.6%) over TNFerade (10.3%.) Moreover, the median survival in both arms of the study was 9.9 months.

What this suggests is a diminishing benefit for TNFerade over time, so that as more patients are treated for longer, it will be difficult for the drug to demonstrate a significant survival benefit over standard of care.

The second interim analysis will tell us a lot more about how TNFerade is working.

GenVec ended the third quarter with $14.2 million, which the company says is sufficient to fund operations into the fourth quarter of next year. Having basically one year of cash in the bank is a precarious position for any biotech company, so I'd expect GenVec will be forced to raise more cash relatively soon. The company continues to talk about partnering TNFerade but there has been action to date.

Several readers emailed to criticize me for this week's


(XOMA) - Get Report

write-up in which I (gently)

knocked the company

for waffling on the timing of a partnership for its experimental diabetes drug XOMA 052.

Jesper B. thinks I'm making much ado about nothing when I questioned why Xoma was starting new studies of XOMA 052 in diabetes and cardiovascular disease. Robert A. says my column took "journalistic liberty" in interpreting what XOMA CEO Steven Engle said on the company's conference call.

In response, all I can say is that I'm a Xoma fan, inasmuch as I've stated previously a partnership for XOMA 052 should (hopefully) propel the stock price higher. When I first made that call in August, Xoma shares were trading at 80 cents. Today, the stock is around 70 cents.

Being a proponent of a Xoma, however, doesn't mean that the company is immune from criticism. The only takeaway message I got from this week's conference call is that partnering discussions for XOMA 052 are dragging on longer than anticipated. That's frustrating, more so since XOMA executives are now changing their story.

What I prefer to see is a company that under-promises and over-delivers. I'm holding out hope that Xoma comes through, but in the meantime, a kick in the pants from shareholders (and outspoken columnists like myself) seems entirely justified.

John W. writes, "

Adam, are you going to go with my elected Biotech CEO of the year, Dr. Bill Carter from Hemispherx Biopharma (HEB) ? He's the best biotech CEO -- for shorts! You and I seem to agree on the worst biotech stocks. We don't always agree on the best biotech stocks, but that's fine, most of the game of biotech is avoiding the losers. Good luck to you Adam, you take a lot of heat, but you have my respect.


Thanks, John. His email reminds me to once again request that readers send in their nominations for the best and worst biotech CEO of 2009. I'll consider your picks when I crown the winner and loser in December. You can send your picks to me via email by

clicking here

. Please write "Best CEO" or "Worst CEO" in the subject line of your email.

Next up, an email from Charles H. "

I am curious about your thoughts on Santarus (SNTS) . They have real products and currently have sales around $35 million quarterly, profitable for some time. Current market cap is only $211 million -- small since there's approximately $150 million in annual sales. Santarus' main drug is an alternative to Prilosec for acid reflux and other gastric problems ... sold under the Zegerid brand name. They also have two FDA dates coming up December 4th and 9th. The first is for a new formulation prescription tablet to add to the arsenal, the second is an over-the-counter version through partner Schering-Plough now Merck (MRK) - Get Report.


I'm in agreement with Charles that Santarus is an undervalued stock right now if you look just at the current business. Third-quarter sales of Zegarid were strong at $31.5 million, which means on an annualized basis, the company is trading for less than two times sales.

An big overhang on the stock right now, however, is the ongoing Zegarid patent challenge between Santarus and

Par Pharmaceuticals


. Santarus has expressed confidence that it will win the case, but the final decision is up to a judge, and he hasn't ruled yet.

Obviously, a win by Par in this case would bring a generic version of Zegarid to the market, which would significantly impact Santarus' business.

If Santarus wins the case and the FDA approves the over-the-counter version of Zegarid, the stock should move higher.

Lastly, an email from Adi, "

In your article dated Sept. 18, you mentioned that you would like to see Cyclacel Pharmaceuticals (CYCC) - Get Report conduct a randomized study pitting sapacitabine against best supportive care in elderly acute myeloid leukemia (AML) patients. Are you pleased with the outcome of the phase 2 study that Cyclacel just reported on Oct. 28?"

Cyclacel reported one-year survival of 30% in elderly patients with newly diagnosed AML or first-relapse AML treated with two of three different sapacitabine dosing schedules. I thought the data were encouraging, even though the study lacked a control arm. The stock sold off on the data release, but I haven't heard a good explanation for why.

A full presentation of the data from this phase II study will be made at the upcoming American Society of Hematology (ASH) annual meeting, including response rates and duration of response. Cyclacel will also be presenting sapacitabine data in patients with myelodysplastic syndrome at the ASH confab.

-- Reported by Adam Feuerstein in Boston

Adam Feuerstein writes regularly for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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