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Joel K. emails, "Thanks for your insight. I use to be a doubter of your columns but after getting burned multiple times by going contrarian, I have started listening and stopped losing. I would like to hear your thoughts on Vivus ( VVUS) and whether it is a good speculative play. I was impressed with the phase 3 erectile dysfunction drug data that was just released and I think the obesity drug has a good shot of approval." I'm on record ranking the three obesity drug stocks in this order: 1) Vivus, 2) Arena Pharmaceuticals ( ARNA) and 3) Orexigen Therapeutics ( OREX). My view seems to be in line with the market. Vivus is outperforming its weight-loss peers so far this year, even with the stock at $!0.60 down from its 52-week high of $13.68 reached last month. I do worry that Vivus' run is done, or slowing down, now that we're less than a month away from the FDA advisory panel on July 15 which will review the company's weight-loss drug Qnexa. A positive recommendation from the FDA panel is no sure thing. Qnexa does a good job in helping obese patients lose weight, but the safety and tolerability of the two-drug regimen is a question mark.
Amy P. asks, "I find it very interesting that on the bottom of the web page for Crave-NX, Generex Biotechnology ( GNBT) states that Generex Oral-lyn is available for sale in India." It's interesting but not surprising. Generex's marketing people don't appear to be entirely on the same page as the company's lawyers, who have finally updated filings with the Securities and Exchange Commission to more accurately reflect the regulatory and commercial status of Oral-lyn, Generex's oral insulin spray, in India. "To date, we have received regulatory approval in Ecuador, India, Lebanon and Algeria for the commercial marketing and sale of Generex Oral-lyn, although as per the terms and conditions of the regulatory approval in India, a local clinical study must be conducted before the product can be offered for commercial sale in that country," Generex disclosed in its 10-Q for the fiscal third quarter ended April 30, 2010. (Emphasis mine.) The company's previous disclosure, in its 10-Q for the quarter ended Jan. 31, 2010, did not make clear that sales in India were conditioned upon completion of a study: "The product
- Efforts to get Oral-lyn approved in Syria are delayed because the Syrian government requested Generex conduct an in-country clinical trial.
- Generex has submitted Oral-lyn for approval in Bangladesh, Kenya, Yemen, Iraq, Iran, Libya and Sudan. My (admittedly snarky) comment: Generex looks to be cornering the Axis of Evil market with Oral-lyn, although there is still no word on the timing of the company's North Korean filing. Wait a second... hasn't it been reported that Osama bin Laden is a diabetic? Hmmm, makes you wonder.
- In the last quarter, Generex awarded 1.75 million stock options to executives, directors and management employees with a fair value of just over $1 million. Me: Good for Generex's executives, not so much for Generex shareholders. For those keeping score at home, Generex's stock price fell 29% to 45 cents a share in the same time period. Since the fiscal quarter ended, Generex shares have sunk further and are now trading at 34 cents a share. The company faces delisting from Nasdaq unless shareholders approve a reverse stock split.
- As for Crave-NX, Generex's diet glucose spray sold in drugstores and convenience stores, the company is being sued by a woman in California who alleges she was misled by the product's advertised weight-loss claims. Generex, in its SEC filing, says the company intends to fight the lawsuit.
- Generex posted revenue of about $328,000 from its over-the-counter glucose and energy sprays in the April 30 fiscal quarter, up from revenue of $45,000 one year ago. But on a sequential basis, Generex's revenue in the recently closed quarter was down 24 percent from $431,000 in revenue in the Jan. 31 fiscal quarter.
Mark M. emails, "I have followed many of your articles on Dendreon ( DNDN). I have owned Dendreon for a few years now and, while I am very optimistic overall, I have one major concern and question: What is the likelihood of Dendreon getting reimbursement from the insurance industry and Medicare that is close to what their price for Provenge treatment is? Any word on this yet?" No cancer drug approved on the basis of a survival benefit has ever been denied insurance reimbursement (private or Medicare) in the U.S. I don't see any reason for Provenge to be the first exception to that rule. The Provenge launch is in the early days, but Dendreon has told investors that doctors are receiving prior authorization from insurers for Provenge coverage, even if actual checks have not yet been cut. Insurers, including Medicare, can take up to three months to pay claims; Provenge has only been available for about a month. Dendreon has in place financing programs to help doctors and patients cover the reimbursement gap and co-pays. Regardless, Wall Street's concerns about Provenge reimbursement will not be quelled until insurers cut real checks, doctors deposit the money into their accounts, then use it to buy their wives or mistresses more plastic surgery. OK, maybe that last part isn't necessarily true, but you get the idea.
Onward. An email from Nick C: "I know you have been very bearish on Discovery Labs ( DSCO) in the past. Now that the company has gotten rid of
Joe A. writes, "Adam, what is your take on the recent delay from AspenBio Pharma ( APPY)? How long of a setback do you think this could be?" One benefit of being a stock commentator and not an investor is that I get to read and laugh at disastrous news updates like the one posted by AspenBio last week without wincing in pain as my stock portfolio takes a hit. I'm sorry if that's what happened to you, Joe, but Aspen is ripe for mocking. Aspen is being forced to delay a re-filing of its FDA approval application for the AppyScore appendicitis test because of "unexplained variability in results from site to site in the initial draft of the statistical analysis report," the company announced on June 7. The results come from a just-completed AppyScore phase III study. "Unexplained variability" isn't explained in great detail but let's assume that Aspen has discovered an unacceptable level of variability in the accuracy of the AppyScore appendicitis test across the hospitals where the study was conducted.
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