Welcome to the "biotech mailbag." I get a lot of great reader email and feedback -- keep the email coming -- which I try hard to answer directly. But often, there are questions asked or issues raised that could benefit a wider audience.

So consider this weekly column a chance to ask me questions about biotech or take me to task for something I wrote. I'll pick the best of the mail and address it here. Now, off to the mailbag.

This week's topics include


(EXEL) - Get Exelixis, Inc. Report

, new hepatitis C drugs,

Introgen Therapeutics

(INGN) - Get Inogen, Inc. Report

and Alzheimer's. Let's get to it.

Reader F.M. raps me on the knuckles for writing about

Lexicon Genetics


in last week's

mailbag. He thinks I should focus instead on Exelixis. "Its platform technology in small molecules is powerful, multiple pharma collaborations, and


( DNA) just paid $40 million for ... one molecule," he says.

I like Exelixis for all the reasons F.M. states. The company's pipeline of targeted cancer drugs is deep -- 11 compounds in or near clinical development, including four drugs in phase II trials. Another three drugs should be entering clinical development in 2007. All the drugs are designed to interrupt multiple signaling pathways that cause tumors to grow. Many of these drug targets have been validated by drugs currently on the market.

And then there are partnerships with Genentech,


(GSK) - Get GlaxoSmithKline plc Sponsored ADR Report


Bristol-Myers Squibb

(BMY) - Get Bristol-Myers Squibb Company Report


Some of these Exelixis drugs are going to fail. Blowups in biotech drug development are inevitable, and cancer is especially tough. But Exelixis' deep pipeline provides some cushion from failure. I see the company as a way to diversify risk with a single investment.

There are some things I worry about with Exelixis. The stock sports a market cap just under $1 billion already, so it isn't cheap. Developing all those drugs costs a lot of dough, too, which could mean significant dilutive financings ahead. (To its credit, Exelixis has used some creativity to raise money while sparing shareholders a ton of dilution.) Finally, I worry that while the pipeline provides diversification, all the drugs are still emanating from a single lab and technology platform. If that's flawed, it could mean trouble.

For all these reasons, a conservative way to invest in Exelixis is to take advantage of drug-development stumbles or dips in the stock price to buy shares. Last November, for instance, Exelixis temporarily suspended patient enrollment in one of its phase II studies because of an unexpected adverse event. The stock dipped from $9-plus to around $8 per share. If you had bought the stock on the day the bad news hit the tape, you'd be up more than 25% today.

The folks at

Vertex Pharmaceuticals

(VRTX) - Get Vertex Pharmaceuticals Incorporated Report

called to raise a couple of issues with Tuesday's

column about its hepatitis C drug telaprevir. Specifically, Vertex believes that investors have overinterpreted the initial release of data from the PROVE 1 study last December. It's this data that's partially responsible for the stock's recent weakness.

In my column, I wrote:

After 12 weeks of treatment, Vertex reported that 88% of patients on a telaprevir-containing arm had undetectable levels of the hepatitis C virus in their system, compared with 52% of patients in the control arm. But when these results were adjusted for the 9% of patients who dropped out for adverse events, the undetectable rate in the telaprevir arm was reduced to 80%, below the 90%-plus rate that many investors were expecting at this stage of the trial.

Vertex PR chief Michael Partridge points out that the calculation to get to this lowered 80% cure rate was not something done by Vertex (it was number-crunching, ad hoc, by some analysts), nor is it really proper, given the amount of data available on these patients. Patients who dropped out of the study might reduce the cure rate, but at this point, it's not known by how much, he says.

Partridge also wanted to emphasize that with the PROVE studies under way, Vertex is not making any specific comments about telaprevir safety. Yes, questions have been asked about a drug-induced rash on the basis of anecdotal patient reports, but Partridge emphasizes, fairly, that there have been no changes made to any of the studies under way, and in fact, regulators allowed a new study to begin (PROVE 3) on the basis of telaprevir safety data that Vertex shared. And it should also be noted that the side effects identified so far also occur with patients taking pegylated interferon and ribavirin, so it's not clear how telaprevir is contributing to toxicity, if at all.

I'm glad Partridge called me to discuss the column. I explained to him, and he agreed, the real story of telaprevir will be told not by picking nits over data past but from the data we'll get soon enough. Stay tuned. Vertex is definitely a biotech stock to watch.

What about other companies developing new hepatitis C drugs? Reader L.S. owns some

Idenix Pharmaceuticals


and wants to know how close to market it is. She's also wondering about the competitive landscape.

Idenix is involved in both hepatitis B and C. Its hep B drug, Tyzeka, was approved last October. Tyzeka enters a somewhat crowded and competitive field. It will grab some market share, but I don't see the drug as a real value driver for the stock. The thing that gets Idenix moving again will be its hep C drug candidate, NM283, also known as valopicitabine.

NM283 is under a bit of a cloud right now because high doses of the drug caused unacceptable GI side effects, forcing Idenix to lower dosing in a phase II study. Will lower dose mean lower efficacy? (The drug already seems less potent than Vertex's telaprevir.) There is also uncertainty over whether NM283 can be given alongside ribavirin, which is one of two drugs used now to treat hep C patients.

There should be some clarity on NM283 at the European Association for the Study of Liver Disease meeting, April 11-15, where Idenix will present data from an NM283-ribavirin interaction study. That meeting should also be the forum at which Idenix releases final phase II data on low-dose NM283. After that, we wait for Idenix and the FDA to thrash out details for phase III NM283 trial(s).

Additional companies with interesting hep C drugs in development include




( SGP) and


TheStreet Recommends



Others also involved in the area include




Human Genome Sciences

( HGSI).

Two emails came in asking about Introgen Therapeutics. Reader K.M. said it best when he asked, "How does a company like Introgen stay in business?"

If only I knew, K.M., I'd bottle it and make a fortune. Biotech stocks are like cats -- they have nine lives. Drop 'em off a building, run 'em over with a car, it doesn't matter, because they bounce back. That's Introgen: Years of futility, management missteps and investor bamboozlement don't seem to matter. Introgen just finds new suckers to buy the stock and keep its lights on.

Ouch. I'm harsh, but speaking the truth sometimes hurts. For those not familiar with the Introgen story, here's what you need to know: Its lead drug is called Advexin. It's a kind of gene therapy that supposedly inserts an operating P53 gene into cancer cells, which then suppresses tumor growth and kills the cancer. Nifty, if only it worked, which it doesn't.

Introgen ran a series of phase II studies about six years ago in head-and-neck cancer patients, with unspectacular results. But that was before management began slicing and dicing the data in a frantic search to find something positive. Then,


The phase II trials were a success. Introgen claims discovery of a "biomarker" in some patients that correlated Advexin with improved survival.

Groundbreaking stuff, Introgen insists. And with that, management began laying it on double thick. Introgen now claims, absurdly, that it's going to seek FDA approval (with the agency's enthusiastic encouragement, apparently) with phase II data culled from all this retrospective, data-mined nonsense.

There are also two phase III studies of Advexin under way, running for years now even though major cancer research centers across the country have stopped enrolling patients. Introgen's latest knee-slapper has the company insisting that one of these trials will be analyzed soon to "support" its FDA filing. Yeah, right.

If there is one thing that Introgen is good at (besides misleading investors with years of mindless happy talk and endless press releases) is raising money. Cash was finally dwindling last year, but somehow, the company managed to raise another $24 million in December. That's good for about a year's worth of operations. And just last week, Introgen filed a $150 million shelf. Meow.

Reader G.C. emails to express frustration with the current Alzheimer's disease drugs because, at best, they only slow the progression of the disease. They don't do anything to stop or reverse it. "Could you comment on the various theories about ameliorating or curing Alzheimer's and which companies may be leaders in each approach?" he asks.

Sure thing, G.C. Obviously, I don't like


( NRMX) or

Myriad Genetics

(MYGN) - Get Myriad Genetics, Inc. Report

. To see why, click

here and

here. But there are other companies to look at.





( WYE) are partners in the development of AAB-001, a monoclonal antibody targeting beta-amyloid that is currently in phase II trials for the treatment of mild-to-moderate Alzheimer's. We're waiting to hear about the results from this study and whether or not the companies plan on pushing AAB-001 forward into a phase III trials.

It's still uproven, but AAB-001 (also known as bapineuzumab) is probably the most talked-about experimental drug in the field. There's a lot of anticipatory excitement over this drug because it attacks the sweet-spot of Alzheimer's research, beta-amyloid plaque clearance, and also because of a previous effort by the two companies to develop a similar drug, which, despite some exciting efficacy data, was shut down due to toxicity.

While AAB-001 is not unique in its goal of elimination of beta-amyloid plaques, the route the drug takes to get there -- immunotherapy -- is different.

Beta-amyloid immunotherapy attempts to treat Alzheimer's by inducing or enhancing a person's own immune system to clear beta-amyloid from the brain. Immunotherapy can take two basic approaches: Active immunization stimulates the body's own immune system to manufacture beta-amyloid antibodies that recognize the substance as foreign, attack it and clear it from the brain. The alternative approach is passive immunotherapy, whereby a synthetically manufactured antibody is injected into the body, seeks out and attaches to beta-amyloid and clears it from the brain.

AAB-001 takes the latter, passive, approach. The drug is a monoclonal antibody designed to recognize and attach itself to a specific portion (the N terminus) of the beta-amyloid protein. Once attached, beta-amyloid fragments are sequestered and cleared from the brain by glial cells, non-neuron support cells in the brain. Only a very small amount of AAB-001 appears to penetrate the blood-brain barrier (a possible red flag). But AAB-001 also appears to work outside the brain, in the peripheral circulation, which may mean that it prevents beta-amyloid from getting into the brain.

Elan and Wyeth are also working together on an active immunotherapy approach to treating Alzheimer's. The two companies have another compound known as ACC-001 in a Phase 1 trial. And separately, the two companies are active in the field. Elan recently partnered with Canadian-based

Transition Therapeutics


to develop a drug called AZD-103.

Eli Lilly

(LLY) - Get Eli Lilly and Company (LLY) Report

is also developing a monoclonal antibody targeting beta-amyloid. The drug, M266, recently started a Phase 2a study. This drug appears to be similar to AAB-001, with the major difference being that it's designed to attach itself to a different part of the beta-amyloid protein.


(PFE) - Get Pfizer Inc. Report

is also getting involved in this area via its April 2006 acquisition of privately held biotech firm

Rinat BioScience

. One of the drugs under development at Rinat is RN1219, also a monoclonal antibody (humanized) that targets beta-amyloid clearance. RN1219 is still in preclinical testing.

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

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