BOSTON (TheStreet) -- Let's kick off this week's Biotech Stock Mailbag with a tweet rather than an email.Via Twitter, @bobbandera asks, " Any opinion on the Keryx Biopharmaceuticals (KERX) data released for its colon cancer drug?" The Keryx cancer drug in question is perifosine and much of the data presented this week are not new, but first released last May at the American Society of Clinical Oncology (ASCO) annual meeting. Here's what I wrote about the perifosine data last May: "The data presented on perifosine at ASCO came from a small, randomized phase II study in patients with second- or third-line metastatic colon cancer. Patients treated with a combination of perifosine and the chemotherapy Xeloda reported that it took 28.9 weeks before their tumors started growing again. That's more than double the 11 weeks for patients treated with Xeloda alone. "Twenty percent of patients in the perifosine arm of the study reported tumor shrinkage compared to 7% for patients in the Xeloda-alone arm. Perifosine patients were also living longer, although survival data is not yet mature." On Monday, Keryx presented an update to this perifosine trial. Importantly, the now-mature survival data looks strong, with median overall survival of 18 months for the perifosine-Xeloda patients compared to 11 months for the Xeloda-alone patients. The survival benefit was statistically significant in favor of perifosine. The rest of the efficacy data -- response rate and progression-free survival -- remained unchanged from when the data were first presented last May. These data are certainly encouraging, but as I noted last May, this phase II study was small, with only 38 patients enrolled. And only half the patients in the study received prior treatment with Erbitux or Vectibix, the two colon cancer drugs from the EGFR inhibitor class marketed by Eli Lilly ( LLY) and Amgen ( AMGN), respectively, that are commonly used in second- and third-line colon cancer patients.
Tim K. writes, " After listening to the presentation by Dr. Robert Lodder of Spherix (SPEX) during the OneMedForum, I'm intrigued by the potential of D-tagatose as a treatment alternative for Type 2 diabetes. The low market cap, lack of debt, positive interim Phase III results as well as proven safety profile suggests to me that Spherix is ready for a dramatic upswing in 2010 as it gets ready to file its New Drug Application. What do you think of Spherix, and with so many different diabetes treatment options being developed out there, what would be the likelihood of a major company being interested in a partnership or buyout after final Phase III results are out?"Spherix faces many difficult challenges. D-tagatose isn't really a drug as we generally think of them. It's a naturally occurring, low-calorie sugar that has already been approved (deemed safe) by regulators as a food ingredient. Efforts by other companies to find a commercial market for tagatose have not been successful. Spherix owns intellectual property rights to use tagatose -- which it calls Nutralose -- as a treatment for Type 2 diabetics. Early studies have shown some limited promise and the company is proceeding with a phase III study. Spherix announced the completion of patient enrollment in this study on Jan. 12. At best, the phase III study of Nutralose is successful but I doubt whether this "new" sugar is going to demonstrate anything more than a modest benefit for Type 2 diabetics. That's the limitation that non-drug drug treatments for diabetes -- and there are a lot of them out there -- carry. Spherix has other problems. The company raised some money in November but still can't commercialize Nutralose on its own. In fact, it doesn't even have a reliable supplier of raw material tagatose. Finding a partner willing to take a shot at marketing a "nutraceutical" for diabetes is made more difficult because Spherix's key tagatose patents expire in 2012. (An extension might be granted if the product is approved, but long enough to justify an investment? I doubt it.) I can understand why the Spherix story would be intriguing, but the realities of the drug business make this company's success a huge long shot.
Ron L. writes, " In your Medivation (MDVN) story this week, you didn't mention that the stock has been taking a beating since the beginning of the year. I appreciate your optimism but it seems like the market is saying otherwise. Can you comment on why you think the market is wrong?"Medivation is down about 13% since the beginning of the year, but let's remember that the stock has also more than doubled in value over 2009. I'm not surprised to see Medivation's price fall as we get closer to the Dimebon phase III trial results. Investors who have made money in this stock over the past year are wise to take profits. I heard that a lot of the recent selling was tied to a single big seller. I am boldly predicting a win for Dimebon, but I'm not reckless either. Alzheimer's disease studies are high risk, Dimebon's included. This is one of those binary events in biotech in which investors who want to play need to be hedged in some way. On a related note, via Twitter, @rabmanduky asks, "Are you worried about the insider selling in Medivation? The CEO, CFO and directors are selling." The selling should be watched, but it doesn't bother me too much. Medivation's executives all have 10b5-1 trading plans in place, which is supposed to preclude them from selling on insider information. If the Dimebon study fails, @rabmanduky, please send another tweet reminding me that I should have been more worried.
This is probably corny and unnecessary, but it's nice to get complimentary notes from folks like John H.:" I have been reading the comments that readers have given you on the recent Cell Therapeutics (CTIC) article, and want you to know that there are more people who are with you than those who are against you. You are covering one of the most wickedly volatile sectors in all of stock investing, and making even the smallest negative comment on a company is like calling someone's baby ugly. People who invest in the biotech sector are essentially signing up for bronco-billy stocks, and there is absolutely no way you will please everyone with the articles you write. Please do not let the harsh responses deter you, because there are many out there in the investing world that want and need your research and opinions. Thanks for your hard work!" And then there are guys like Jim J.: "Dude! It's ok. I understand completely where you were coming from. Don't take it hard on yourself. People don't realize you're drunk half the time at these conferences and you aren't really listening to them, just pretending to. You've bashed so many stocks and it's just sad with your incorrect information you post. But I give you applause for them because even after people think you're such a