Biotech Stock Mailbag: Seattle Genetics

BOSTON ( TheStreet) --Clinical trial results and drug approval announcements move biotech stocks. With that reminder, Sandy L. kicks off this week's Biotech Stock Mailbag with a related question:

"I know you talk all the time about the importance of paying attention to FDA drug approvals and clinical trials. What are the biotech events on your radar screen right now?"
Mailbag

Seattle Genetics ( SGEN) tops my list with two, potentially pivotal studies of two blood cancer drugs due to report results in the near future.

A phase II study of SGN-35 in Hodgkin's lymphoma is expected to read out in late September or October, said Seattle Genetics on a conference call Tuesday night. This phase II study is considered registration worthy because it's being conducted under a special protocol assessment (SPA) with the FDA. If the SGN-35 study is positive, Seattle Genetics intends to file for accelerated approval in the first half of 2011.

The phase II single-arm study enrolled about 100 patients with Hodgkin's lymphoma that continued to progress after two or three prior therapies. Look for a response rate from SGN-35 treatment in the range of 25-30% with durability of 4-6 months as an important demarcation of the drug's efficacy, although Seattle Genetics CEO Clay Siegall told me in an interview last week that FDA hasn't placed any specific response rate hurdle on the drug in the SPA.

A single-arm response rate study needs strong data to pass muster with FDA these days. A previous and smaller phase I study of SGN-35 in Hodgkin's patients showed a response rate of about 50%.

The second Seattle Genetics study that investors should be watching is a phase II study of SGN-33 in elderly patients with acute myeloid leukemia (AML). I'd consider this study the more risky of the two, given the need for SGN-33 plus chemotherapy to demonstrate a survival benefit over chemotherapy alone in a very sick patient population that has been difficult to treat effectively in studies of other drugs.

On Tuesday night's conference call, Seattle Genetics said to expect results from the SGN-33 study in late August through October. The data from this study were expected earlier so optimists will say the timeline slip could be due to the fact that SGN-33 treated patients are living longer. Or not. Be careful.

For more stock-moving biotech events, consult this calendar of upcoming clinical trials that I published earlier this month.

I'd also take a look at two lists of drugs facing FDA approval decision dates, particularly this FDA drug approval calendar focused on a very busy October.

KEH emails, "What are your thoughts on Transdel Pharmaceuticals ( TDLP.OB)?"

I dinged Transdel in this column last October for spinning negative phase III study results of the company's topical pain drug ketotransdel. Since then, new management has taken over Transdel's reins and the company appears to be walking back some of the more outlandish claims made in the past. That's progress of sorts.

The biggest obstacles standing in front of Transdel today are a serious lack of money and questions about the proprietary value of its topical (transdermal) drug delivery technology.

Transdel takes generic drugs and formulates them into a cream that patients can spread on their skin. Ketotransdel, the company's lead product, is a skin cream formulation of the non-steroidal anti-inflammatory drug ketoprofen. A pain reliever that someone can spread on achy joints or muscles quickly (and avoid systemic exposure of the drug) is a good idea. It's not an original idea, however. Endo Pharmaceuticals ( ENDP) already sells Voltaren, an NSAID gel pain reliever. Other companies have gel or cream-based drug delivery technology as well.

Transdel says patients will prefer ketotransdel's cream-based formulation over a gel like Voltaren because the cream absorbs into the skin faster and is less messy. Transdel's probably right here -- creams are generally preferred over gels -- but Transdel doesn't have any data yet comparing the safety and efficacy of ketotransdel to Voltaren.

The first phase III study of ketotransdel ran into some problems when the primary endpoint (reductions in pain scores) on an intent-to-treat basis failed to reach statistical significance. Transdel went back and found 35 patients who should not have been enrolled in the study. When these patients are excluded in a "modified intent-to-treat" analysis, ketotransdel was able to demonstrate a statistically significant reduction in pain scores compared to placebo, with an okay-but-less-than-hefty p value of 0.038.

Transdel hopes FDA will accept this retrospective, modified intent-to-treat analysis, but admits in SEC filings that there is "no assurance" FDA will do so.

Regardless, Transdel needs to run a second, confirmatory phase III study before seeking ketotransdel's approval. The company doesn't have the money for such a study right now, but is seeking a partner willing to pay for it in exchange for commercial rights. Transdel will run out of money at the end of year unless it can raise more money, either through a partnership or the sales of stock/debt.

If FDA doesn't accept the data from the first study, Transdel or a partner will be forced to run two new phase II studies and ketotransdel's progress will be significantly delayed.

Voltaren is on an $80 million annual run rate after the first quarter, so that gives you some idea of the commercial potential for ketotransdel. I'd be careful, however, before assuming Transdel can totally replace or even take a significant bite from Endo's market share without seeing more data on ketotransdel. Also note that Endo's Voltaren is approved for pain relief from osteoarthritis, which is a broader and superior label than what Transdel might get from the "soft tissue injury" patients enrolled in Transdel's first phase III study.

At around a $1.10 a share and an enterprise value of under $18 million, Transdel is not exactly pricing in much for ketotransdel's potential approval and commercial success, assuming only one additional phase III study is required.

Lonnie W. asks, "What's next for Onyx Pharmaceuticals ( ONXX)?"

The data announced Monday from the study of carfilizomib in advanced multiple myeloma patients -- 24% response rate and duration of response of almost 7.4 months -- were better than most investors expected. Doubters who didn't think Onyx had a chance in hell of convincing the FDA to approve carfilzomib on an accelerated basis next year should be rethinking their position.

Some important questions about carfilzomib will remain unanswered until we see the full dataset from the trial at the American Society of Hematology meeting in December 4-7.

Most important is the response rate to carfilzomib in multiple myeloma patients who are truly refractory to Takeda's Velcade compared to patients who relapsed after treatment with Velcade. The refractory group of patients is sicker and cannot be retreated with Velcade, which gives a purer measure of carfilzomib's efficacy in a patient population without current treatment options.


Phil asks, "Just a quick thanks for your excellent coverage of the Vivus ( VVUS) FDA advisory panel hearing with your live blog earlier this month. A tough job for sure -- listening, typing (faultlessly, no less) and responding to listeners queries. I was wondering if you are also planning to live blog the Arena Pharmaceuticals ( ARNA) panel as well? With all the interest the Vivus panel generated, I'm sure you'll have another huge audience."

Thanks Phil, and yes, I am planning to live blog the Arena Pharma FDA advisory panel tentatively scheduled for Sept. 16. Stay tuned for more details.

The live blogs of FDA advisory panel meetings have proven to be very popular so I'm expanding coverage to meet demand. My plans right now are to provide live coverage of the following FDA panels:

Jazz Pharmaceuticals ( JAZZ) (JZP-6 for fibromyalgia) on Aug. 20; MELA Sciences ( MELA) (MELAFind for melanoma detection) in November; and Orexigen Therapeutics ( OREX) (Contrave for obesity) on Dec. 7.

I'm interested in covering the FDA panel for Alkermes ( ALKS) (Vivitrol for opioid dependence) on Sept. 16 as well, but first I need to figure out how to clone myself.

-- Reported by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. 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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