Biotech Stock Mailbag: AspenBio

BOSTON ( TheStreet) -- Let's kick off this week's Biotech Stock Mailbag with a tweet from @Budfester, who asks, "Got any feeling about AspenBio Pharma ( APPY)?"


AspenBio will likely release results from the phase III study of its AppyScore appendicitis blood test in June, around the same time the company plans to re-file for AppyScore's approval with the U.S. Food and Drug Administration, according to AspenBio Vice Chairman Greg Pusey and CFO Jeff McGonegal, both of whom spent some time talking to me this week.

It's easy to file for FDA approval, convincing FDA to grant approval is a bit more difficult. AspenBio knows this well because the company pulled AppyScore from the FDA's medical device review process last year, choosing instead to conduct a new clinical trial and resubmit.

McGonegal insists that there was nothing wrong with the data from the previous phase III study of AppyScore; the company merely felt that it was quicker and faster to run a new clinical trial rather than try to answer FDA's questions with data from the old study.

I must say, that answer had my head spinning a bit. AppyScore demonstrated a negative predictive value of 83% in the old phase III study, which was well below expectations. AspenBio shares tanked when the data were announced in January 2009.

Negative predictive value (NPV) measures AppyScore's ability to accurately determine if a patient isn't suffering from appendicitis (and therefore can be sent home from the emergency room safely.) This is the primary endpoint of the study and the most important clinical measure of AppyScore's utility in the emergency department.

When AspenBio loosened the test's sensitivity in a post-hoc analysis of the initial phase III study, the negative predictive value rose to 89%. When AspenBio looked at data combining AppyScore and a standard test measuring white blood cell counts, the NPV rose to 93% (or 98% with loosened sensitivity.)

I'm throwing out a lot of NPV values here, but they're important to keep in mind as a gauge for what constitutes positive data from the new phase III study.

AspenBio says the new study was conducted with more rigor. It deployed the test at academic medical centers (instead of community hospitals) which should improve data collection and prevent patients from being lost during follow-up. The new study should have more patient data to analyze and is also using a lower sensitivity for the NPV analysis, which should improve results.

McGonegal didn't want to set expectations for the AppyScore NPV in the new phase III study, but I think it's very safe to assume that results from the new study have to improve on the 89% NPV recorded the last time around. Given the changes made to the new study, there is no reason why AppyScore shouldn't perform better.

What NPV score gets AppyScore approved by FDA? Again, McGonegal and Pusey don't have a specific number to throw out, saying that FDA has not set a specific efficacy hurdle for the test.

If I had to make an educated guess, AppyScore's new NPV must exceed 95%, and may even need to reach 98-99%, in order for 1) FDA to approve; and/or 2) for AppyScore to have any chance of being clinically relevant and therefore used by doctors in hospital emergency departments.

Right now, doctors using simple blood tests, patient exams and CT scans to diagnose appendicitis achieve NPV levels north of 95% and even as high as 99%. This is the real-world efficacy bar for AppyScore because if the test on its own can't beat the current standard of care, emergency rooms are only adding cost to the diagnosis of appendicitis without gaining any diagnostic value.

AspenBio has, in the past, reasoned that one value of AppyScore could be the elimination of expensive CT scans from the diagnosis of appendicitis. True, in theory, except that AppyScore works by measuring a marker for inflammation. The test doesn't specifically screen for appendicitis. This means that most ER docs would likely still use a CT scan to make sure that it's the appendix and not some other nearby organ, which is in trouble.

AspenBio shares, trading around $4.30, have almost doubled in value in the past two weeks, as the stock attracts the interest of retail investors and traders. Some of the information published about AspenBio on blog sites like Seeking Alpha is incorrect or omits key facts, so I'd be careful.

Sticking with Twitter, @bobbandera asks, "Seems Acura Pharmaceuticals ( ACUR) has to take niacin out of all their drugs. How much of a delay is that? What's the procedure?"

If only it were so easy. Acura's big problem is that niacin is the key ingredient in the abuse-resistant technology used in the pain drug Acurox. Without niacin, drug abusers can swallow excess Acurox tablets to get high. Niacin-less Acurox would still contain ingredients to prevent abuse by crushing or dissolving the tablets, but there are already FDA approved oxycodone formulations on the market that do the same thing.

Last week's FDA advisory panel on Acurox was very clear in its dislike for niacin as a way to prevent prescription drug abuse. The panel's strong vote against recommending Acurox's approval coupled with the FDA's negative opinion on the drug means two things: 1) Acurox in its current formulation is not getting approved; and 2) Acura will most likely need to return to the lab and completely rework its abuse-resistant technology if it ever wants to get any of its pipeline products approved.

I'm surprised Acura hasn't held a conference call yet to discuss the FDA advisory panel decision. King Pharmaceuticals ( KG), Acura's marketing partner, seems to be driving this train, but aren't the odds high that King dissolves the Acura partnership given niacin's dead end?

Alex M. writes, "A colleague mentioned he had been persuaded to buy Pro-Pharmaceuticals ( PRWP.OB) a few years back, and after years of languishing in losses, he's wondering whether it's actually a real company with a real drug candidate, Davanat, or whether it's an out-and-out scam or somewhere in between... Do you have a view on this company? I'm a huge admirer of your column, and have to admire anyone who flushes CEOs of companies like Generex ( GNBT) and Cell Therapeutics ( CTIC) out of the woodwork in the way you have. I suspect that makes you eminently qualified to comment on Pro-Pharmaceuticals."

I called the public relations people working with Pro-Pharma on Wednesday asking for slides and/or published articles so that I could review the phase II data on Davanat in colon cancer, the drug's lead indication.

Pro-Pharma's spokeswoman explained to me the company hasn't presented or published any of the Davanat data (from a study conducted in 2004-2006) because the FDA places "serious restrictions" on publishing clinical data without the agency's approval.

"Since Pro-Pharmaceuticals is in the design stage of phase III based on its phase II study, the company has not applied to the FDA regarding publishing the phase II clinical data," the company spokeswoman told me in an email, after she consulted with Pro-Pharma's chief scientist AnatoleKlyosov. I'm not identifying the spokeswoman because she's nice and is just doing her job. No need to embarrass her any further.

Naturally, the biotech B.S. detector chip implanted in my brain went into red alert mode after hearing that cockamamie excuse for not sharing old phase II data. The story doesn't get any better after reading what little Pro-Pharma has said publicly about Davanat.

Pro-Pharma claims to have run a phase II study enrolling 25 patients with advanced colon cancer treated with Davanat and the chemo drug 5-FU in which the median overall survival was 6.7 months, or 46% higher than the 4.6-month median overall survival for patients treated with best standard of care.

Except that survival advantage is totally made up because the study treated all patients with Davanat and 5-FU, with no control arm to perform any credible analysis of a survival benefit. Pro-Pharma acknowledges this in the fine print of its corporate slides, stating that the 4.6-month median overall survival for patients treated with best standard of care comes from a "recent publication" i.e. someone else's clinical study.

Davanat is supposed to increase the amount of chemotherapy that can be administered to a patient while also decreasing the side effects. After looking at the sparse clinical data available on Davanat, my confidence level in the authenticity of these claims is rather low.

Pro-Pharma seems to operate on a shoestring budget, which has forced the halt to several other studies of Davanat. It's not entirely clear if any of the Davanat studies were ever completely finished per design; Pro-Pharma says it stopped the phase II colon cancer study, for example, because "we achieved our objective."

Um, but usually, companies complete patient enrollment and treatment before conducting an analysis and concluding that a study's objectives were met. For some reason, Pro-Pharma operates clinical trials backwards. Maybe this is why it's the only company in all of biotech that needs FDA permission to present or publish phase II data?

On Wednesday, Pro-Pharma said it was moving ahead with plans for a commercial launch of Davanat in Colombia. That's Colombia, the country in South America. Apparently, Colombia President Alvaro Uribe is really excited about bringing Davanat to all Colombians suffering from colon cancer.

I'll stop now. Alex, I hope you have your answer.

-- Reported by Adam Feuerstein in Boston.

Follow Adam Feuerstein on Twitter.
Adam Feuerstein writes regularly for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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