NexMed is developing a topical cream for erectile dysfunction (I hope you can figure out where it's applied) that has been beset by approval delays in the U.S. and Canada. In July 2008, the U.S. Food and Drug Administration refused to approve NexMed's erectile dysfunction (ED) cream, Vitaros, citing concerns about a possible cancer risk and manufacturing issues. Just last month, Canadian regulators also turned it away, citing manufacturing deficiencies. NexMed is working to address all these concerns. The company submitted a cancer risk study to the FDA and is now awaiting the agency's response. I haven't dug deep into all the regulatory issues involving Vitaros, so I'll assume the drug gets approved eventually. I'd be more worried about whether the product has a commercial future. The active ingredient in Vitaros is a blood vessel-dilating drug known as aloprostadil. Vivus ( VVUS) used to market an ED product known as Muse, which also contained aloprostadil. Muse was a commercial flop because 1) it required the man to insert a small pellet-sized dose inside his penis, and 2) soon after Muse launched, Pfizer ( PFE) received FDA approval for Viagra. Needless to say, men with erection troubles were much happier to swallow the little blue pill than to manually insert anything down there. Viagra became a blockbuster; Muse busted. An aloprostadil cream might be a preferred method of administration, but the clinical data on topical aloprastadil only shows a modest improvement in erectile function. I'm also a bit freaked out by the "burning sensation" side effect observed by some men. Um... no thanks to anything that burns down there. NexMed is also going to face a stiff challenge from cheap, generic versions of Viagra when Pfizer loses patent protection in 2012.
Jason B. writes, " What is your take on Sequenom (SQNM)? I have researched and like what is coming down the pipeline. Also, the large trial will be complete in June. Short interest is still high (16 million shares) and new management is doing a better job so far. If they can get the T21 across the goal line, it could be the next Dendreon (DNDN) or Human Genome Sciences (HGSI)? I'm always looking for a favorable risk-reward ratio. I think Sequenom could fit the bill. Downside is they will need to raise more money this year or partner." I look at Sequenom with a lot of caution. I do believe in the validity of the underlying science, which means genetic material from the fetus (could be DNA or RNA) is present and can be detected in the blood of the mother. The big unanswered question, however, is whether Sequenom, or anyone else, can develop a reliable, accurate and non-invasive genetic test that can "read" that fetal DNA or RNA and allow doctors to diagnose a host of diseases, most notably Down's syndrome. Sequenom's blowup last year calls into serious question the company's ability to turn the science into a viable commercial test product. Certainly, Sequenom's credibility after its "data mishandling" fiasco is in tatters, so it's going to take large and independent clinical trials to give anyone confidence in a prenatal gene test from the company's labs. At this point, Sequenom is still trying to finalize its prenatal Down's syndrome test, which will be used to screen for Down's in patient samples that are being collected. These important validation studies could start the latter half of this year and into 2011. Could Sequenom be another Dendreon or Human Genome Sciences? Sure, why not? If a real non-invasive, prenatal test of Down's can be developed and validated, the stock could return to the teens or higher. How likely is that? I have no idea.
Dan M. asks, " What's the story with Targacept (TRGT)?"I love Targacept for its experimental depression drug TC-5214. The phase II data on TC-5214 that Targacept presented last October was phenomenal, and it led to the signing of a monster partnership with AstraZeneca in December. TC-5214 is going to be a huge drug in the depression treatment market. The problem for a lot of investors looking at Targacept today is time -- there's too much of it between now and when AstraZeneca and Targacept plan to start the first phase III study of TC-5214 in the middle of the year. My sense is that Targacept is viewed as being catalyst deprived, which is the kiss of death for a lot of investors who figure, 'why own a stock now if there's no trade-able event on the near horizon?' I can understand that sentiment, but I also know that Targacept at $20 a share and an enterprise value of $500 million is a total steal based on the blockbuster potential of TC-5214. Patience will be rewarded.
|Cell Therapeutics CEO Jim Bianco|
Finally, a memo to the guys at BioMedReports: It's probably a good idea to educate yourself before issuing a press release squawking at a supposed error I made in last week's Mailbag about Keryx Pharmaceuticals' ( KERX) design for the phase III study of perifosine in colon cancer.What you don't seem to understand (but you should) is that when patients were treated with perifosine in the phase II study, doctors didn't know that patients with the wild-type KRAS gene were the only ones capable of responding to EFGR inhibitors like Erbitux. Keryx didn't collect data on the KRAS gene status of the 50% of patients in the phase II study treated previously with Erbitux, therefore it cannot say what impact this may have had on the final efficacy results reported for perifosine from that study. Today, colon cancer patients are screened for KRAS status, which directs treatment to include or exclude Erbitux or Vectibix, another EFGR inhibitor. How this relatively new development in colon cancer treatment will impact perifosine's phase III study is not known, which is why I appropriately raised the issue as a risk factor. -- Reported by Adam Feuerstein in Boston. Follow Adam Feuerstein on Twitter.