) -- An email from Peter Y. kicks off this week's Biotech Stock Mailbag:
Wondering if you could give your perspective on Merrimack Pharmaceuticals'(MACK) - Get Report chances of a successful outcome on their just completed enrollment for MM-398 in phase III trial for pancreatic cancer. Wondering how this might play into the Feuerstein-Ratain Rule?
MM-398 wraps the "old" chemotherapy drug irinotecan in spheres of liposomes, or fats, which is supposed to increase the absorption of the drug inside tumors where it can be most effective and minimize exposure in surrounding, healthy tissue, therefore reducing potential for side effects.
Merrimack's phase III "NAPOLI-1" study enrolled 400 patients with advanced pancreatic cancer that no longer responds to gemcitabine-based therapy. In other words, these are second-line pancreatic cancer patients. The patients are randomized to one of three arms: 1) MM-398 monotherapy; 2) MM-398 plus 5FU-leucovorin (a chemotherapy regimen); or 3) 5FU-leucovorin as the control. The study's primary endpoint is overall survival with progression-free survival and objective response rate as key secondary endpoints.
The MM-398 study completed enrollment at the end of August. Merrimack executives have guided to the release of top-line results in the fourth quarter or possible early in the first quarter of next year.
With that as background, let's see what the Feuerstein-Ratain rule says about the outcome of the MM-398 study. As a reminder, the F-R Rule says phase III studies of cancer drugs have a zero percent chance of success (100 percent failure rate) if the company sponsoring the study has a market cap of $300 million or less, measured four months before the study results are announced.
Merrimack's fourth quarter 2013-first quarter 2014 guidance for MM-398 data makes it harder to nail down a timeframe from which to calculate the company's market cap. I'm going to use January 1, 2014 as my target date because it's the midpoint of Merrimack's guidance.
Four months back from Jan. 1, 2014 is Sept 1, 2013, which puts Merrimack's market cap at just under $350 million. That places Merrimack outside the F-R Rule dead zone, but just barely. Vical and Ziopharm were similarly positioned ahead of their respective phase III studies recently and both failed.
The F-R Rule has proven to be very accurate to date, so I'd have to give MM-398 low odds for success in this second-line pancreatic cancer study. The company's recent below-market financing and subsequent stock sell off likely reflects low investor expectations for the MM-398 study.
One more note, particularly for traders: Keep in mind that Merrimack is conducting multiple phase 2 studies of another cancer drug, MM-121 with data read-outs expected in the fourth quarter, likely before we hear about the MM-398 study results.
Moving on to
and the highly anticipated release of study results on its Duchenne muscular dystrophy drug drisapersen.
Despite my best effort, which included begging, Schikan was not willing to narrow down the window for when partner
would be presenting the results from the drisapersen phase III study and the U.S.-based phase II "DEMAND-5" study. All he would say is drisapersen data will be presented at an upcoming medical meeting before the end of the year.
The possible venues and dates for the drisapersen data are:
World Muscle Society: Oct. 1-5
American Society of Human Genetics: Oct. 22-26
EURO-TIDES: Nov. 13-14
Oligonucleotide & Peptide Based Therapeutics Congress: Nov. 18-19
Based on positive efficacy seen in the previous "DEMAND-2" study presented in April, investors generally expect drisapersen to demonstrate a statistically significant benefit in six-minute walk distance in the phase III study as well.
The big risk to the outcome of the phase III study, as outlined by Schikan during our meeting Wednesday, is the effect that younger DMD boys (between 5 and 7) and those with greater walking ability at baseline will have on the overall results.
What we know now, but what Glaxo and Prosena say they didn't know when the phase III study was started, is that DMD kids younger than 7 are generally still capable of improvements in six-minute walk distance without treatment. It's not until DMD boys reach 7 that the disease begins to deteriorate muscle function to the point where walking becomes more difficult.
The worry is younger and healthier DMD patients enrolled in the phase III study may mute the overall treatment effect of drisapersen, thereby making it harder for the drug to demonstrate a statistically significant difference over placebo, Schikan said.
To be clear, Schikan wasn't warning me that the drisapersen phase III study was going to fail. Not at all. But he did speak rather openly about the risk of enrolling younger patients into the phase III study. Also, the phase III study does not stratify patients by age at enrollment, meaning there is a chance of an age imbalance between the drisapersen- and placebo-treated patients.
Glaxo and Prosensa have not disclosed the breakdown by age of the 186 patients enrolled in the phase III study, so we won't know if any of this impacts the final results, if at all, until data are presented.
One more item of note from my Prosensa meeting: The company (and Glaxo) have a "contingency plan" if the phase III study fails, Schikan said. Data from three studies -- DEMAND-2, the phase III and DEMAND-5 will be aggregated and analyzed with the goal of demonstrating an overall benefit or a benefit for certain relevant subsets of DMD patients i.e. boys 7 and older. This aggregated data analysis, if positive, would be submitted to the FDA for review and potential approval, Schikan said.
The contingency plan is not unreasonable and might succeed, depending (obviously) on what the efficacy and safety data look like. To be fair,
is counting on FDA accommodation and leniency in order to get eteplirsen approved on a small amount of phase II data. It's not crazy to assume FDA might also be cooperative with Glaxo and Prosensa.
I probably speak for a lot of investors when I say I just want to see the new drisapersen data already so that we can finally get some answers to pressing questions about Prosensa and Sarepta.
Kevin L. writes:
I like the Rockwell Medical story. Administering small doses of maintenance iron to patients via the dialysate used during the hemodialysis procedure makes a lot of sense, more so than waiting for a patient's iron stores to be depleted and replacing it all at once with a large IV iron infusion.
Rockwell believes SFP, if approved, will be a superior and safer method for maintaining hemoglobin levels in kidney dialysis patients. By switching to SFP, dialysis centers will reduce costs because use of IV iron and ESAs (Amgen's Epogen) will decrease. I want to hear more of the Rockwell/SFP bear story -- I'm sure it exists -- but until then, the company's pitch for the potential of SFP is really compelling.
Just a bit on revenue potential: Rockwell CEO Rob Chioini pegs IV iron sales in the U.S. today at $330 million. He believes the company can sell SFP at 2-3 times the price of IV iron and still lower the overall costs for dialysis clinics.
Bob B. asks:
Short answer is yes, I believe MiMedx's tangle with FDA regarding regulation of its cell-based wound healing products might portend trouble for Osiris, which markets similar products without FDA review and approval. Whether or not FDA cracks down on Osiris or not and when is really impossible to predict.
Let's back up a bit for some explanation. MiMedx's wound-healing products AmnioFix and EpiFix are derived from human amniotic tissue. As long as these tissues are only manipulated minimally during the manufacturing process, FDA considers them to be human cells, tissue and cellular and tissue-based product, or HCT/P, which means no regulatory review as a drug or medical device is required.
MiMedx believed it could sell AmnioFix and EpiFix as HCT/P products, but last month, FDA sent the company a
stating the agency's belief that these products no longer meet the minimal manipulation criteria. FDA told MiMedx that AmnioFix and EpiFix are now considered "biologic products" that must undergo review for efficacy and safety just like other drugs.
Big problem for MiMedx. The company, of course, disputes the FDA's conclusion and intends to appeal. MiMedx is also raising a stink about competitors, insisting FDA take a closer look at their products which may also violate the HCT/P manufacturing guidelines.
Osiris' Grafix and Ovation are HCT/P products today -- unless FDA concludes otherwise, like it did with MiMedx.
-- Reported by Adam Feuerstein in Boston.
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;
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