BOSTON, Mass. (


) --The Biotech Stock Mailbag is open for business. Let's kick things off with an email about




"What is your opinion on Genta's Genasense phase III results in the fourth quarter," asks Joan. "Do you believe their biomarker approach on low-normal LDH will achieve the holy grail p-value of 0.05 that

FDA is looking for to approve the drug?"

Genta is such a blast from the past. I haven't given the company much thought or coverage since 2004 when Genasense's phase III melanoma study was

voted down

by the FDA's cancer drug advisory committee meeting.

I used to eat, drink and breathe Genta back in the day, so it was with a sense of nostalgia that I sat in on CEO Ray Warrell's presentation Wednesday at the Rodman & Renshaw investor conference.

Warrell is a man on a mission to get Genasense approved for melanoma and prove the cynics and the FDA wrong. It's been a long, bumpy road that has seen Genta rejected multiple times at the FDA, its stock de-listed and cast off to the bulletin boards for penny-stock status. Genta has been forced to issue billions (yes, billions) of shares of stock just to remain solvent. A more recent reverse stock split and capital restructuring has put the company on more solid financial footing (although it still has 500 million fully diluted shares outstanding and a stock that trades for 40 cents.)

Let me say at the top here that I don't know if this next phase III study of Genasense in melanoma is going to work or not. I'm not going to make a prediction. The old Genasense data in melanoma weren't strong, and the FDA rightly rejected the drug.

As Joan indicated, Genta is taking a different, more targeted approach this time around. After digging around in the old phase III study, Genta says it found a subset of melanoma patients with low levels of LDH, a blood enzyme, who appeared to live longer after treatment with Genasense. Conversely, patients with elevated levels of LDH were not helped at all by Genasense.

It's widely believed that melanoma patients with elevated LDH levels tend to have a worse disease prognosis, including shorter survival times.

Genta dug even deeper into these Genasense patients with lower LDH levels, eventually separating them into narrower subgroups defined by their specific LDH levels. What the company found was that patients with "low normal" LDH seemed to survive the longest after treatment with Genasense.

If there's a scientific rationale for why this is true, I didn't hear Warrell discuss it Wednesday. But the company decided to conduct a second, phase III study of Genasense, this time enrolling only patients with "low normal" LDH levels.

The results of that study -- dubbed Agenda -- should be released in the fourth quarter.

If the Genasense trial is a success, Genta will displace

Vanda Pharmaceuticals

(VNDA) - Get Report

as the most shocking, long shot of long shots winner in biotech this year.

After all, Warrell is betting his company's survival on a pivotal study whose hypothesis was derived from a subgroup of a subgroup of a previously failed study. In other words, Genta data-mined a data-mined subset. Stunts like that are never supposed to work in biotech!

But this has been a year in which crazy stuff worked, so we'll know soon enough if Genta can add itself to that list.

My BioBuzz item on

Opexa Therapeutics


perturbed Nicholas, who writes, "Stop hating

Bleep-hole. You dont

sic know

Bleep about Tovaxin or the validity of the data. The data was good. Your

sic a

Bleeping political science major, not a medical expert. You dont

sic know

Bleep so dont

sic write 'more of the same' without more evidence and understanding. Your

sic a loser!!"

I know, Nicholas' spelling needs work, although I'm proud he got "loser" right. (Remember, it's l-o-s-e-r, not l-o-o-s-e-r.)

Judging by his email, I'm not sure I'd want Nicholas to be my go-to expert on Tovaxin either, but his anger was echoed in other emails, all of which accuse me of glossing over the "newness" of Monday's update from the phase II Tovaxin study.

I don't think I did that at all. The point I was making was that Monday's data announcement was "more of the same" about the subgroup of multiple sclerosis patients Opexa cherry-picked out of the failed phase II study from last fall.

I don't see any sensible reason to believe in Tovaxin until the company conducts another randomized and controlled study in these multiple sclerosis patients.

If day traders and momentum investors want to use Opexa as their newest favorite chew toy, then so be it, but please, don't try to base your argument on the strength of the Tovaxin data.

Onward. Thomas L. writes, "Hi Adam, I know you don't have time to comment on every email you get, but I was wondering if you could comment on

Osiris Therapeutics

(OSIR) - Get Report

and their diabetes cure."

Thomas sent along a link to a story in a U.K. publication about research with Osiris' stem-cell drug Prochymal in patients with

Type 1 diabetes


My comment: Don't believe the hype. The

dismal failure of Prochymal

in two studies of patients with graft-vs.-host disease, coupled with the previous setbacks in Crohn's disease and knee cartilage repair, are more than enough to send Prochymal to the drug development graveyard.

Osiris is a zombie stock -- dead but acting as if it's still alive.

That last line also answers Zach P.'s email. He asked, "Any thoughts on why Osiris isn't sitting closer to cash levels given the placebo-like results for Prochymal."

Osiris equals the living dead.

Rick K. emails with a question about this week's

obesity drug data



(VVUS) - Get Report


"Qnexa is simply phentermine and topamax, both available today. So why wait for or use Qnexa?"

Rick's question is a good one and highlights one of the commercial concerns raised about Qnexa. Generic phentermine is widely prescribed as a weight-loss drug today, so what stops doctors from adding a prescription for generic topirimate, instead of reaching for branded Qnexa?

Vivus responds by stating that the dosages of phentermine and topiramate used in Qnexa are not available generically. The patented formulation of the two drugs into Qnexa -- delayed-release topirimate and immediate-release phentermine -- also plays a role in the drug's efficacy, according to Vivus.

The Qnexa data released Wednesday were impressive, especially from an efficacy standpoint, where weight loss exceeded anything seen to date by competing drugs from

Arena Pharmaceuticals

(ARNA) - Get Report


Orexigen Therapeutics



Qnexa will continue to be nagged by worries about safety, primarily the central nervous system side effects of topiramate.

Next up is the second phase III weight-loss study from Arena's drug lorcaserin, which should be released before the end of the month. After that, all three weight-loss drugs, Qnexa, lorcaserin and Orexigen's Contrave, will face the scrutiny of obesity doctors at the Obesity Society annual scientific meeting Oct. 24-28.

Next up, a compliment from Brad L. He writes, "Hey, I just wanted to say thank you for your great work. I'm an individual investor (my investment income is my livelihood) and I just wanted to say I find your articles to be very valuable. Biotech is such a hard thing to invest in because so few people really understand the underlying science (including me) so it is really good to read from someone who clearly gets it. There is so much hype about biotech stocks (I think because of their size and obscurity) that, truthfully, the articles of yours I find most valuable are the ones where you shoot companies down like


(AGEN) - Get Report

. Thanks a lot for providing a professional viewpoint. I wanted you to know that there are a lot of real investors out here who really appreciate it."

Fan mail is just as fun to receive as hate mail. Thanks for the kind words, Brad, and thanks for being a reader of mine.

Speaking of Antigenics, Stan M. takes issue with my

valuation metrics

for the company's vaccine adjuvant candidate Q21.

"Your low-ball estimates for Antigenics royalty income from QS21 are ridiculous, especially when the company has already told us that it expects $500 million in peak royalty revenue," writes Stan, adding. "Get a life!"

Sorry, that's wrong. What Antigenics' CFO Shalini Sharp said Wednesday was that $500 million in royalty revenue represented the total market potential if all QS21-containing vaccines garnered 100% market share in malaria, flu, cancer etc.

She did not say that Antigenics expects to receive $500 million in royalty revenue from QS21.

Think about it this way: If Antigenics received a 3.5% royalty (low-single digits) on sales of all QS21-containing vaccines, it would take more than $14 billion in vaccine sales to kick back $500 million in royalty revenue.

You believe Antigenics' partners are working on $14 billion worth of peak vaccine sales? Really?

Lastly, I remember

Bill Meehan

on this day.

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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