BOSTON ( TheStreet) -- Let's open the Biotech Stock Mailbag, beginning with an email from Leslie O. about a very important event looming for Poniard Pharmaceuticals ( PARD).

Writes Leslie, " Adam, what's your prediction for results from Poniard's phase III study of picoplatin in small cell lung cancer?"

I have no edge on this one, so I don't have a prediction for you. Needless to say, this is a huge event for Poniard. A successful study lands the company a partnership and a nice bump in the stock price. I'll guess in the $12-plus range. A negative outcome get reported, and Poniard shares will plummet towards cash levels of around $1. The stock was trading Thursday at around $7.

Poniard has guided to data before the end of November.

Picoplatin is a next-generation platinum chemotherapy drug designed to overcome resistance to prior platinum therapy. The drug may also cause less nerve-related toxicity.

The phase III study, dubbed "SPEAR," compares treatment with picoplatin against best supportive care (BSC) in second-line small cell lung cancer (SCLC) patients. These are patients with advanced, progressive disease after treatment with a front-line platinum agent. The primary endpoint of the study is overall survival.

The bull story: A published single-arm phase II study of picoplatin in SCLC patients demonstrated a median overall survival of 27 weeks. Best supportive care (BSC) in this patient population is believed to yield a median survival of around 14 weeks (again, from prior published studies.)

Poniard designed the SPEAR study conservatively so that picoplatin patients need only reach a 19-week median survival for the study to be a success, based on the assumption of a 14-week median survival for patients treated with BSC. Patients in the BSC arm are also prohibited from being treated with other chemotherapies in the second line, which could, in theory, hurt picoplatin's chances of showing a significant survival benefit.

The bear story: Results from single-arm phase II studies routinely overstate a drug's efficacy, so the 27-week survival benefit for picoplatin is likely artificially inflated. Likewise, the assumption of a 14-week median overall survival for BSC patients is too low.

The SPEAR study is also open label, so doctors treating BSC patients may be quick to pronounce and document these patients as disease progressors so they can be treated with a third-line therapy. In Eastern Europe, where many SPEAR patients are being enrolled, various cocktails of chemotherapy drugs are used to treat third-line SCLC. This could boost survival in the BSC arm and make it more difficult for picoplatin to demonstrate a survival benefit.

I did ask Poniard about this latter bear point. The company thinks the advanced disease in SCLC patients entering the study makes extensive use of third-line treatment unlikely.


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.

Last, to answer Charlie's question specifically : No, we're not in the same boat, because Chelsea wouldn't be asking to make these changes to the study if it had confidence in the success of the old endpoint. The mere act of seeking a change tells me that Chelsea doesn't think the old endpoint is going to work.

As I wrote this week, I'm not writing off entirely any chance that the ongoing droxidopa phase III study will come up a winner. For those still invested, I wish the best. I was interested in Chelsea for a short-term trade, but the changed circumstances scuttled my thesis, so I walked away.


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.

Meantime, AMAG shares rebounded this week after the company reported third-quarter Feraheme sales of $2.9 million and deferred revenue of $11.5 million -- the former in line with reduced analyst expectations but the latter better than previously forecast.

AMAG is still struggling to find a welcome home for Feraheme in dialysis clinics, but the drug does seem to be gaining an early foothold in the chronic kidney disease (pre-dialysis) treatment area -- a less established but larger commercial opportunity.

I'm not making any excuses for making a bad call on AMAG after the Feraheme approval. Being bullish on the stock as it fell from the low $50s to the high $30s was a mistake. But AMAG's third-quarter report was encouraging and should have reset Feraheme expectations enough to help the stock move higher from here.


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.

Needless to say, this is a story that is not going away anytime soon.


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.

Of course, no such deal materialized. It's stuff like this that causes stupid expectations to be set and contributes to Dendreon's volatility.

So Ben, my grasshopper, have patience.


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!
Adam Feuerstein writes regularly for TheStreet.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; click here to send him an email.