BOSTON (TheStreet) -- Welcome back to the regular Friday edition of the Biotech Stock Mailbag. I hope everyone read Thursday's bonus Mailbag, which included an update of the Biotech Stock Mailbag Readers' Portfolio.Craig N. emails to ask, " I thought you wrote a very good, thoughtful article on BioSante Pharmaceuticals (BPAX) in 2008. I'm wondering about your thoughts on the company since the safety factors are looking good and the company seems to have enough cash to get LibiGel to a new drug application in mid 2011. Are you thinking of doing another article on them?"
Sean S. asks, " Am I crazy, or did Biomedreports.com erase the stories from their web site where they pumped Novelos Therapeutics (NVLT.OB)?" No, you're not crazy. Biomedreports, a web site that appears to exist solely to promote biotech penny stocks, has apparently removed a story penned by the site's co-founder, M.E. Garza, last December in which he predicted Novelos and its lung cancer drug NOV-002 to be one of the "big winners" of 2010. He disclosed that he owned Novelos shares and advised his readers to buy it, too. That column, titled "Novelos Therapeutics' (NVLT.OB) CEO Is Eyeing 'Revolutionary' Phase III Study Results," is no longer available on Biomedreports' web site. Also gone from the site is a follow-on column from Garza posted days later that repeated his Novelos promotion. I was able to find a cached version of the latter Novelos column, in which Garza writes: "I recently spoke, at length, to the CEO of Novelos and he's expecting a Dendreon type move for the share price of NVLT as he eyes 'revolutionary' Phase III results for the company's NOV-002 oncology treatment compound. I rarely hear a CEO talk so openly and bullishly about their own companies (mostly due to strict forward-looking rules and laws). After studying all the information and recent filings by the company, it's easy to see that these guys are very excited about their drug compound. It's become pretty obvious, even to the most casual observer, that the patients involved in the trial are living longer than expected and that is one of the reasons why investors have begun to take more interest in the company and their Phase III study."
Taylor writes, " Something seems to be on the horizon for InterMune (ITMN) in March. Can you comment?" An FDA advisory panel is meeting on March 9 to review the efficacy and safety of InterMune's pirfenidone as a treatment for the progressive and fatal lung disease idiopathic pulmonary fibrosis (IPF). This FDA panel meeting is high stakes for InterMune. If the panel gives the thumbs-up to pirfenidone, it will likely become the first drug for IPF approved by the FDA or its counterparts in Europe. With well over 200,000 IPF patients in the U.S. and Europe, InterMune could transform pirfenidone into a highly profitable drug with more than $1 billion in peak sales. The potential hitch in the plan is that InterMune conducted two phase III studies of pirfenidone in IPF patients. One study was positive, but the other was negative. InterMune will argue that the combined data from both studies demonstrates pirfenidone's benefit for IPF patients. This is likely to be the major discussion point at the FDA panel meeting on March 9. My prediction (for what it's worth): The FDA isn't going to be entirely pleased with the mixed pirfenidone data and the agency will voice that displeasure when the pirfenidone briefing documents are released publicly a couple of days before the advisory panel meeting. Some investors will panic at the sight of a negative FDA review and InterMune's stock will fall. However, at the actual advisory panel meeting, the point will be driven home that doctors today have no good treatment options for patients with IPF. It's a fatal disease. The pirfenidone data, while not perfect, is convincing enough. The experts on the FDA panel, therefore, will likely side with InterMune and vote to recommend pirfenidone's approval.
Again via Twitter, a tweet from @jq1234t: " What's your thought on Aryx Therapeutics' (ARYX) strategic option? Currently, it trades at $40 million market cap. Budiodarone should be worth as much." Aryx (and budiodarone) looks cheap today because the company announced last week that no partner was willing to sign a deal for the atrial fibrilation drug. Aryx has brought in an investment bank to explore its "strategic options" -- the not-so-subtle code for surrender. Given my previous lecture about accountability, I'll note here that Aryx was a stock I liked, although Aryx's fortunes were already on thin ice to due not-so-hot data from a clinical trial of its blood-clotting drug tecarfarin announced last July.Risk-taking investors might be tempted to bite into Aryx today on the off chance the company does find a buyer for its drug assets. I've never had luck advocating that strategy with other stocks, including the now-defunct Panacos Pharmaceuticals and Xoma ( XOMA - Get Report) (another one of my bad calls).