Charlie writes, " Adam, was thinking about getting into Chelsea Therapeutics (CHTP) and was wondering how the risk has increased? If the FDA rejects its appeal for a new study, aren't we in the same boat as before?" I decided to pull back from my long trade idea in Chelsea this week because the company indicated that it's seeking permission from the FDA to change the primary endpoint of the second and still ongoing phase III study of droxidopa in patients with orthostatic hypotension. I view this as adding on new and unwanted risk for three reasons: First, it's entirely uncertain whether the FDA will allow Chelsea to make the changes in the study it seeks. Second, even if the FDA grants permission to change the study endpoint, we don't know if the "new" endpoint will work any better than the old one. Remember, a lot of thought and negotiation between Chelsea and the FDA went into designing the phase III studies with the old endpoint. But now, Chelsea thinks it's found something better? That's risky, in my book.
An email from Jonathan H.: " I know you're a fan of AMAG Pharmaceuticals (AMAG) and hoping you could discuss the potential upside with Feraheme if Aranesp's sales decline based on recent data? (Not even sure if there is a correlation)." The data Jon refers to comes from a study presented and published last week showing that patients with kidney disease treated with Amgen's ( AMGN) Aranesp to correct anemia were almost twice as likely to suffer from strokes as those treated with a placebo. The study failed to demonstrate that treatment with Aranesp reduced the number of deaths or heart attacks in chronic kidney disease patients compared to placebo treatment. These troubling data might spur doctors to use less Aranesp in their kidney disease (pre-dialysis) patients. To correct anemia without Aranesp, these doctors might turn increasingly to intravenous irons like AMAG's Feraheme. I say "might" because Feraheme is still in the very early days of its commercial launch so we lack any evidence that doctors are giving up on Aranesp for Feraheme.
Sean N. writes, " You're still a short-loving jerk and I don't know why you feel the need to bash small biotechs all the time, but I have to admit that the Cel-Sci (CVM) story about Byron Biopharma raises some uncomfortable questions. Why would the Cel-Sci guys just make up a company like that?" Your question is a good one. Prior to publication, I asked Cel-Sci to provide contact information for Byron Biopharma and/or any evidence to prove that Byron was a real company and not just a phantom entity. Cel-Sci chose not to respond. Not to sound too egotistical, but my story raises serious questions about the conduct of Cel-Sci management. Both publicly, and more important, in Securities and Exchange Commission filings, Cel-Sci has stated that it licensed South African rights to its cancer drug Multikine to a company known as Byron Biopharma. But if it is subsequently discovered that Byron doesn't exist or is a front for some other entity or individual, then Cel-Sci executives have a lot explaining to do.
An email from Ben L.M.: " Where is Dendreon (DNDN) going wrong? As you saw, Dendreon announced that it has completed the submission of the amended Biologics License Application for PROVENGE to the FDA. They accomplished this submission early since analysts were expecting this to be done in mid to late November at the earliest. The stock popped over $2 a share on the news but is now down on the day. Is this news not a positive development? Is the rumor true that the demise of hedge fund Galleon caused a big sell off in the Dendreon position that they held? Dendreon will have their next regular quarterly report on Nov. 11 and then has announced a series of investor conference presentations in the days that follow. Would Dendreon CEO Mitchell Gold be doing all of these things if he was not certain that Provenge will get the FDA's blessing? Thanks and I would value your opinion!" I responded to Ben privately after reading his email. I told him, "patience, grasshopper." Dendreon is not going wrong. The FDA re-submission of Provenge on Monday was earlier than expected. That's good, but it was also a trade-able event, which explains the see-saw stock reaction. (The stock may have dipped Monday, but it moved higher again Tuesday and remains there Thursday.) Galleon's demise isn't going to have any long-term detrimental effect on Dendreon. While it will be nice to hear Gold speak to investors in the next few weeks, I don't expect to hear anything new or different from what he and the other Dendreon executives discussed at the company's recent investor meeting. Patience, grasshopper. Provenge is in the hands of the FDA, but the agency isn't likely to approve the prostate cancer vaccine until the spring of next year. Investors are somewhat anxious about an ex-U.S. partnership for Provenge. When will Dendreon sign a deal? On what terms? Will it come before Provenge's U.S. approval and launch, or after? I'm in the camp that believes a Provenge partnership for Europe comes later rather than sooner, so the near-term absence of a deal doesn't particularly bother me. One overwrought biotech stock newsletter writer didn't help matters recently when he brashly predicted a deal between Dendreon and Roche/Genentech was imminent just because a Roche/Genentech executive joined Dendreon's board of directors.
I'd like to end on a sad note. This Mailbag is the last edited by my supremely talented and hard-working editor, Samantha Shaddock. Sam -- known lovingly around these parts as Blammo! -- is leaving TheStreet.com today for new and exciting journalistic adventures. Folks like Sam do not get the credit they deserve, but they are a vital part of this place. Sam worked tirelessly behind the scenes to make writers like me appear way smarter than we really are. (Any stupidity displayed here, however, is my fault entirely.) Her whip-smart headlines, sharp editorial eye and knowledge of all the mysterious workings of our Web publishing system were unparalleled. I've worked with a lot of editors in my 20-plus years as a journalist. Sam ranks up there among the finest and most dedicated to her craft. I'm going to miss her greatly. I hope you'll join me in wishing Sam the best of luck in the future. G-dspeed Blammo!