HASBROUCK HEIGHTS, N.J. ( TheStreet) -- Three and a half years ago, I knocked Nymox Pharmaceutical ( NYMX) for hyping the prospects for an experimental prostate enlargement drug NX-1207 without divulging much information about the drug or how it was performing in early clinical trials.

"Nymox doesn't pass the smell test," was my verdict on May 12, 2007. That was a good call because Nymox, trading around $6 back then, lost half its value over the next two years and only in the last two months has the stock recovered to the point where it now trades around $7 a share. Nymox closed Wednesday at $6.89 a share.

Time passes and stories can change, so Nymox CEO Paul Averback gave an hour of his time recently to update me on the company's progress with NX-1207, which is now in dual phase III studies as a treatment for benign prostatic hyperplasia, or BPH.

The drug: NX-1207 is a "proprietary protein that leads to apoptosis cell death ," said Averback.

I asked Averback to elaborate because many drugs cause cell death. I wanted him to better explain '1207's structure and what the drug targets or acts upon to initiate cell death.

Averback wouldn't divulge anything more about '1207 or how it works. The drug is "a non-public structure for proprietary reasons… It induces apoptosis in a number of ways that are way beyond what the investing public needs to know," he said.

Why the secrecy? I understand the need to protect trade secrets but most drug companies don't have a problem disclosing information on a drug's composition and its mechanism of action. To say only that '1207 is a protein that kills cells says nothing.

Averback is more open about the way '1207 is administered -- via what is known medically as a "transrectal injection." Translation: A doctor inserts a probe into the man's anus to access the prostate. A needle is then threaded through the probe, through which '1207 is injected directly into the prostate tissue. Sounds frightening, but Averback insists the procedure is performed without anesthesia in a doctor's office and takes only a few minutes. A benefit of '1207 is that patients can be relieved of BPH symptoms for a year or more with a single transrectal injection versus having to take a pill every day, which comes with side effects). Surgery is an option but also carries risks and side effects, says Averback.

The disease: Benign prostatic hyperplasia, or BPH, is known more commonly as an enlarged prostate. The condition affects men as they get older with symptoms that generally include trouble urinating, frequent urination or pain during urination.

Some men find BPH doesn't affect their lifestyle and choose to do nothing about it; others seek out treatment with medications. BPH drugs include Alpha-1 blockers (Flomax, Cardura) which relax the muscles in the prostate and make it easier to urinate; or 5-alpha reductase inhibitors (Proscar, Avodart) which work against male hormones to reduce the size of the prostate. For more severe cases of BPH, prostate surgery is an option.

Nymox is betting that '1207 will be more effective and less bothersome (in terms of side effects) than current BPH pills and surgery. The company also believes that doctors and patients will be attracted to the convenience of treating BPH via injection once a year. This is similar to the approach taken by Amgen ( AMGN) with its new osteoporosis drug Prolia.

The BPH drug treatment market topped $5 billion in 2009, according to Nymox (Flomax sales alone in 2009 totaled $1.5 billion for Boehringer Ingelheim) although less expensive generic BPH drugs are now available.

Phase II data: Nymox conducted two phase II studies of '1207, results of which were published last year in Expert Opinion by Dr. Neal Shore of the Carolina Urologic Research Center. Shore is a paid consultant to Nymox. The company has also presented '1207 data at regional conferences sponsored by the American Urological Assocation (but never at the AUA annual meeting.)

The first was a randomized, double blind, controlled study that enrolled 175 patients and evaluated three doses of '1207 (2.5 mg, 5 mg and 7 mg) versus a placebo injection.

The mean improvement in the AUA Symptom Score at 90 days (the study's primary endpoint) was 11 points for the 2.5 mg dose of '1207 compared to a 6.5-point improvement for placebo. The difference was statistically significant. The other two doses of '1207 also demonstrated a benefit over placebo but the difference was not statistically significant.

The second, open-label phase II trial compared two doses of '1207 (0.125 mg and 2.5 mg) against Proscar. The primary endpoint, non-inferiority improvement in AUA Symptom Score, was measured at 90 and 180 days. At 90 days, the 2.5 mg dose of '1207 demonstrated a 9.71 improvement in the AUA Symptom Score versus a 4.13-point improvement for Proscar. The result was statistically significant demonstrating '1207's non-inferiority to Proscar at 90 days. The 0.125 mg dose of '1207 was ineffective.

At 180 days, the 2.5 mg dose of '1207 was also non-inferior to Proscar but the Expert Opinion paper does not provide details on the comparable AUA Symptom Score improvements or whether the results were statistically significant.

The Phase III trials: Nymox is conducting two, parallel phase III studies enrolling a total of 1,000 men with BPH. The double-blind studies, run in U.S. centers, will randomize patients to either the 2.5 mg dose of '1207 or a placebo injection. The primary endpoint is improvement in the International Prostate Symptom Score (IPSS) at 12 months.

Averback says the studies enrolled the first patients in the middle of 2009 but the trials really got underway in earnest in January 2010. Nymox will not provide an update on the progress being made to enroll patients in the study, nor will the company offer an estimate on when top-line results will be released.

Instead, Nymox expects to file '1207 for U.S. approval sometime in 2012, Averback says. (Assuming positive results from the two phase III studies.)

The risks: All BPH drugs to date have been approved based on data demonstrating superiority over placebo after 90 days of treatment. In order for Nymox to win, '1207 has to be superior to placebo after one year. That may not seem like a high hurdle at all, but the long-term efficacy data from the phase II studies is a bit skimpy and hard to interpret. How do we know that the apparently robust benefit derived from '1207 at 90 days or perhaps 180 days can be sustained through 365 days?

Positive, long-term follow up data from the phase II studies of '1207 is published in the Expert Opinion paper but it's not entirely clear how the results were derived. At a 16-27 months follow up of 103 "unselected blinded" subjects, 52% of patients treated with '1207 were not on BPH medication and had not required surgery since their initial treatment. These patients maintained an improvement in AUA Symptom Score of 10.2 points, the paper says.

The paper doesn't specify from which study these patients came from or which dose of '1207 they received. It's also not clear how patients in long-term follow-up can remain blinded given that unblinding the patient data was necessary to analyze the study's primary endpoint. Also worth noting is that the second phase II study was never blinded in the first place.

The paper goes on to cite additional results from long-term follow-up studies showing a sustained benefit from '1207 but the provenance of these data are not clear and even the author Shore writes, "The follow-up study interval was limited, so that full evaluation of the possible evolution of BPH post NX-1207 treatment was not yet possible."

Averback, in our discussion, says the long-term follow-up data are clear enough to demonstrate that men treated with '1207 continue to see significant reductions in BPH symptoms out to one year.

Why did Nymox choose to use a one-year timeframe for its phase III studies instead of going the safer route of just treating for 90 days?

"A one-year endpoint made good sense. Regulators and urologists are happy with it and men won't have to worry about getting quarterly shots. One year was a convenient time point for everyone," said Averback.

The phase III studies are designed with secondary endpoints that include an analysis of efficacy at 90, 180 and 270 days. If the 365-day endpoint fails but the drug works at one of the shorter time points, will Nymox spin the data and seek approval anyway?

One more risk inherent in the phase III studies: Expect a large dropout rate in the study, especially amongst placebo patients given that they must endure a long, one-year study without treatment for their BPH. It's much easier for a doctor to convince a patient to endure a 90-day study but 12 months will seem like forever. Will an expected high drop out rate adversely affect the analysis of the final results?

We'll know at some point. When is not clear, since Nymox won't give investors even a rough timeline estimate for the release of results from the phase III studies. For investors, Nymox and its development of '1207 is an opaque endeavor, which is probably the biggest risk of all and one that remains stubbornly in place three and half years after I first looked at the company.

--Written 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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