This column originally posted on RealMoney.com at 6:59 a.m. EDT. For more information about subscribing to RealMoney, please click here.The Biotech Mailbag is open. Our first email comes from Joe B., who asks for my thoughts on Panacos Pharmaceuticals ( PANC). Joe's email has been sitting in the mailbag for a long while, but it's timely this week because Panacos announced that company researchers have figured out a way to identify the sub-population of HIV patients who respond favorably to its experimental drug beviramat. Cue the angels' trumpets because this is the first bit of encouraging news from Panacos and its beleaguered, delayed and generally dismal beviramat development program in at least a year and half. Excuse the snark, but I'm a recovering Panacostal -- I actually liked this stock when it was much, much higher and you could make the case for beviramat being a $300-million or so HIV drug without anyone laughing at you. Today, Panacos shares could find a home on the sale rack at a 99-cent store. So you understand my bitterness. But that's all in the past. Today, Panacos sports a miserly $11 million enterprise value, and if you believe Wednesday's announcement, beviramat might be back on track. A real HIV drug has to be worth more than $11 million, right? Yes, sure, except... You see, while Panacos was shuffling its feet these past two years, the HIV-treatment market was changing. A lot of really good HIV drugs are on the market today, with more on the way ahead of beviramat. There are so many really good HIV drugs out there now, in fact, that it will be hard to find a place for beviramat except as a last-ditch drug for treating the most ill HIV/AIDS patients.
Indevus Pharmaceuticals ( IDEV) and the recent regulatory setback to its long-acting, injectable testosterone product Nebido is on the mind of Robert E., who writes:
"I was surprised by the FDAMy opinion? The FDA stinks! Alright, I don't really mean that, but it feels good to say it. This Indevus situation is frustrating, to say the least. A quick recap for those not in the loop: Indevus was hoping for an FDA approval of Nebido at the end of the month; instead the FDA wants another safety study -- a big one. The problem is a rare injection reaction -- a brief episode of coughing or shortness of breath -- caused by the oily solution that gives the testosterone in Nebido its long-acting power. As Robert notes, Bayer-Schering already sells Nebido in Europe, where the label describes this particular side effect. In the U.S. studies run by Indevus, one patient reported a coughing episode, but it resolved itself in minutes and the patient continued with further Nebido injections. You'd think the FDA would be comfortable with the European experience with Nebido and approve the product here with a warning label and/or a requirement for some post-approval safety monitoring. Of course, you'd be wrong. Instead, the FDA -- risk averse to the extreme -- wants Indevus to figure out the incident rate that this coughing/wheezing side effect occurs before approval. To answer that question, Indevus will have to run an expensive and time-consuming safety study. From what I hear, the company will have to collect data on 10,000 Nebido injections, almost three times larger than the company's phase III program. That's going to take two years. Which is why Indevus shares have fallen some 75% this year to $1.65 or so. Can I say it again? The FDA stinks!
Food and Drug Administration response to Nebido as it is has been used in Europe since 2003. The one instance of shortness of breath and dizziness in the U.S. trial does not seem to warrant a two-year delay to introduction as the company indicates. Do you have an opinion on this and on the company?"
The announcement this week from Elan ( ELN) and Wyeth ( WYE) of phase II data on their Alzheimer's drug bapineuzumab prompted a question from Tony U., who writes:
"The subgroup without APoE4 was widely said to be 40-70% of the population. Now this is a tremendous range of people. Don't researchers know more about a tighter percentage? Obviously Elan wants it to be closer to the 70%, and it seems that all the news services just ran with that range after results came out. Do you have any sources that can shed light on this?"Tony is referring to the group of Alzheimer's patients described by Elan and Wyeth as "non-carriers" of the ApoE4 gene, which benefited the most from treatment with bapineuzumab. (And we'll leave debate about the robustness of that conclusion alone for now.) Tony's right, Elan's estimate that 40-70% of Alzheimer's patients are non-carriers of the ApoE4 gene is wide and perhaps too high on the upper end of the range. I've read studies elsewhere that peg "carriers" of the ApoE4 gene -- those who don't seem to do too well with bapineuzumab -- in the 45-60% range. There's a 1995 study in the New England Journal of Medicine that pegs the ApoE4 gene-carrying population at 60% of Alzheimer's patients. If that's true, then 70% of Alzheimer's patients can't possibly be ApoE4 non-carriers. Perhaps the best guess right now would be to call it a 50-50 split between ApoE4 carriers and non-carriers.
Two emails worth lumping together hit my inbox a couple of weeks ago. Bobby writes, "I've always enjoyed your column, especially the Mailbag, but not enough to pay for it, so what's up with that?" Later, I received the following from Mirza M.:
"I look forward to reading your articles as they are informative and incisive. I have benefited financially as well. I subscribe to SharkBiotech, which I find useful and unbiased. Any chance you would start your own paid subscription newsletter? If you haven't, I would certainly encourage you to do so. There is an acute need for this in the market; there are hardly any quality newsletters and I'm sure you'd find great demand. I, for one, would not mind paying a good bit for the value received."Bobby was reacting to the new Biotech Mailbag posting schedule, which has the column going out first to our paying customers -- RealMoney subscribers -- on Friday morning. Later Friday, the Mailbag is posted for free on TheStreet.com. Bobby, pay up for a RealMoney subscription, dude! C'mon, you know I'm worth it. Just ask Mirza, he knows the score. And no, I swear, I didn't pay him to write that email, and he's not my cousin or related to me in any way. I promise. I'm also a fan of SharkBiotech, which is written by my buddy Dan Rosenblum. If you don't know it, check it out. Should I write my own biotech subscription newsletter? Great idea! I can't spill any details now, but check back in a couple of months, there might be some big news to announce. Stay tuned... Lastly, for every fan, there's a hater like PDG4you (an alias, I hope), who isn't pleased with my Elan coverage. "You DO realize that you are looking like an idiot on this subject, don't you? I hope some hedge fund is lining your pockets well because your credibility is sure to be shot and you will need to find a new career soon!" I guess this means that PDG4you won't be subscribing to my newsletter. Oh well.