Via Twitter, @Trevorr68 tweets, "Did you catch that bizarre press release from Cel-Sci ( CVM) regarding the $125,000 payment from Byron Biopharma?" Yes. Cel-Sci's announcement Wednesday was noteworthy only in that the company once again failed to disclose anything about the identity or corporate history of Byron Biopharma, which owns South African marketing rights to Cel-Sci's experimental cancer drug Multikine. The partnership between Cel-Sci and Byron is unusual because Cel-Sci, which owns Multikine, actually paid Byron to acquire South African marketing rights. (The payment came in the form of discounted Cel-Sci stock and warrants, which Byron was later free to sell at a substantial profit.) Normally, companies sell the rights to market their proprietary drugs -- they don't have to pay a partner to do so. Wednesday's $125,000 payment from Byron back to Cel-Sci, therefore, isn't much more than a rebate on Byron's realized profits. Call it a Multikine tax, if you want. The payment does nothing to disprove the allegation by a current Cel-Sci shareholder that Byron is a ghost company (most likely a front for a hedge fund) that Cel-Sci used to raise money and improperly sidestep anti-dilution provisions in previous financings.
David Y. asks, "Any thoughts on A.P. Pharma ( APPA)?" Not many, other than to note that the company faces an FDA approval decision date on March 18 for APF530, a drug to treat nausea and vomiting in patients undergoing chemotherapy treatments for cancer. The stock had a big move from 90 cents in December to more than $2 in mid February, but it has since retraced back the $1.60-range. A full approval from the FDA is likely to move the stock higher once again, but I don't know enough about APF530 to predict the agency's decision. I will say that the commercial market for drugs to treat chemo-induced nausea and vomiting is rather crowded, including cheap, generic drugs. APF530 is itself a reformulation of an existing generic drug. Thus, tread lightly with any revenue assumptions.
Stanley B. asks, "What do you think of Arena Pharmaceuticals ( ARNA) and its obesity drug?" Lorcaserin has two main things working in its favor. First, the drug appears to be safe, based on the data publicly available. Second, lorcaserin is a single, new molecule, which might be looked upon more favorably by regulators and potential marketing partners than the dual combinations of existing drugs being developed for weight loss by competitors Vivus ( VVUS) and Orexigen Therapeutics ( OREX). The albatross around Arena's neck is that lorcaserin doesn't help obese patients lose much weight. In the phase III studies, lorcaserin-treated patients only lost about 3% body weight, placebo adjusted. Vivus' Qnexa, by comparison, helped patients lose about 8-9% of their body weight. The FDA is very concerned about the safety of weight-loss drugs, but then, efficacy (or lack thereof) cannot be ignored. It's a tough call, but I'd probably rank Vivus at the top of my list of obesity drug stocks, Arena second and Orexigen third.
Wendy O. asks, "Is there more upside in InterMune's ( ITMN) stock price?" Yes. It's not hard to make a case for InterMune being worth $40-plus, but the easy money has already been made in the past week. Shares zoomed from $14 to the high $30s after an FDA panel voted Tuesday to recommend approval for pirfenidone as a treatment for idiopathic pulmonary fibrosis. I wouldn't necessarily chase the stock. A pullback might make for a better opportunity to buy, especially if InterMune raises money. Anticipation of a financing may explain Thursday's selloff. Some analysts are throwing around $50-plus price targets for InterMune. I guess that's possible, but the assumptions inherent in those forecasts are very rosy. Not impossible, but maybe a bit early. If you want to play around with InterMune valuation scenarios on your own, start with 100,000 IPF patients in the U.S., of which approximately 60% have mild to moderate disease (the target patient population for pirfenidone.) Pricing is a bit tricky but figure a range of $50,000 to $70,000. For penetration rates, assume 40-50% at peak. InterMune plans on selling pirfenidone on its own in the U.S., so don't forget to factor in the costs of selling the drug. I don't know the prevalence of IPF in Europe, but the company has designs on getting pirfenidone approved there, too, albeit through a partner. I'm not a fan of InterMune's hepatitis C drug, but it deserves some value, if even just a little. Finally, the company has about $1 in net cash (minus convertible debt) at present.