Linda M. emails, "I'm interested in your thoughts on the long or short-term growth story of OncoGenex (OGXI)." OncoGenex suffers from the same dearth of short-term catalysts as Exact Sciences. OncoGenex and partner Teva are running twin phase III studies of OGX-011 in prostate cancer, but neither company has offered specific guidance for when data will be ready for release. The best guess I've seen is late 2012. New drugs to treat prostate cancer drugs are hot with investors right now (witness the attention being paid to Exelixis ( EXEL), Medivation ( MDVN) and, of course, Dendreon ( DNDN).) OncoGenex seems to be missing the party. The stock, at $16, trades for about half its value in 2009 after the OGX-011 phase II data were released and presented. OncoGenex CEO Scott Cormack, in an interview Wednesday, says his company's stock price suffers because he can't offer investors a near-term clinical catalyst to play. He also battles lingering misperceptions that Teva was a bad choice for an OGX-011 partnership, he says. Teva, of course, is best known as a generic drug powerhouse, not a big player in new oncology drug development. "Teva was probably not the partner that most investors expected us to choose ... but they are a very smart group and good drug developers," said Cormack in an interview Wednesday. "We were the first deal signed by Teva after they announced plans to branch out into branded oncology drugs so the market didn't quite get it." Most importantly, Teva has put significant financial resources behind OGX-011, Cormack adds, including paying for most of the costs of the two phase III prostate cancer studies and funding a third phase III study in lung cancer that is expected to start soon. OncoGenex today sports a $110 million enterprise value with less than 10 million shares outstanding. That's not very expensive for a company with a late-stage cancer drug, even one that's already partnered.
The stellar cystic fibrosis data announced Wednesday by Vertex Pharmaceuticals ( VRTX) from a phase III study of the company's drug XV-770 prompted investors and analysts to forecast potential peak sales. My article on the VX-770 data pegged the drug's revenue potential in the $400 million to $600 million range, which, in turn, prompted a skeptical @carterkeller to tweet: "Pulmozyme is not cheap and doesn't clear $300M US with everyone eligible and chronic therapy for life. Path to $600M?" The sales math on VX-700 is fairly simple but it is built on assumptions, so kudos to Carter for being skeptical. Start with an estimate of 70,000 cystic fibrosis patients worldwide, of which 4-7% have the G551D genetic mutation that will most benefit from treatment with VX-700. That leaves you with an addressable patient population of between 2,800 and 4,900 patients.
More tweets. @drive_gt3 asks, "Do you think a White Knight appears for Clinical Data (CLDA)? Just can't see it being gobbled up at $30 + the possible milestone $6." I'm assuming R.J. Kirk, Clinical Data's chairman, largest shareholder and chief dealmaker, didn't purposefully leave a better offer for the company on the table. If Eli Lilly ( LLY), for instance, had bid $45 a share for Clinical Data, Kirk would have had no qualms declining Forest Labs' ( FRX) $30-a-share proffer. That makes sense, right? Sure, a higher white-knight bid is possible, but likely? I don't think so. Sounds like the terms offered by Forest were the best Kirk could get for Clinical Data, so that's the deal that got done. Kirk, his affiliates and the rest of the Clinical Data board control more than half the company's shares and have accepted Forest's tender offer. With a head start like that, it's going to be almost impossible for any outside shareholder group to derail this deal. The class-action lawyers are kvetching, of course, but they're just blowing hot air.
@MedRedDad tweets, "I'm surprised to see $MNKD holding so well above $3.50. Any chance mgmt tries to squeeze in an offering pre-FDA meeting?" MannKind ( MNKD) needs money badly so I'm sure management would jump at the chance to sell stock. The company's problem is not supply but demand i.e. finding investors willing to own newly minted MannKind shares at the moment. Two FDA rejections of Afrezza and tons of uncertainty about the product's future don't exactly make MannKind a must-own stock these days.
Joan B. emails, "Hey Adam, now that there is nothing left for Transcept Pharmaceuticals (TSPT) but to wait for the FDA decision on July 14, 2011, you don't need to write at length about it, I just want to know your odds about its approval knowing that all the information about Intermezzo is out, come on just state for the record your odds on this one." You want a number? OK, I say Intermezzo, the middle-of-the-night sleeping pill, has a 65% chance of being approved on July 14. I might be willing to pump up that probability to 70-75% except the middle-of-the-night dosing -- a method of administration for a sleeping pill never before approved by FDA -- adds another level of risk. Transcept appears to have compiled all the data needed to respond to FDA concerns raised last year. That's comforting, but then, this is the safety-crazy, reverse-course, goalpost-moving FDA we're talking about, so really, anything can happen.
Mark B. knows how to rile me up, writing, "Adam, your favorite company just issued a letter to shareholders." Yes! The Cel-Sci ( CVM) shareholder letter, authored by CEO Geert Kersten and Chairman Maximilian de Clara, is an instant classic. Hey guys, any chance of getting a personalized copy? I'd love to frame it for my Biotech Wall of Shame. Geert and Max devote most of the letter discussing the phase III clinical trial of Multikine in head and neck cancer patients. "We have started the study in the U.S.," the men say. Yet, nowhere in the letter does it explicitly state that patient(s) have been enrolled and are receiving treatment. "Starting" the Multikine study is OK, but certainly not as important as enrolling real patients. Has that happened yet? If so, why can't Cel-Sci simply and directly inform investors? A quick check of ClinicalTrials.gov still shows just one medical center in the U.S. signed up to enroll patients in the Multikine study. Just one? No matter, say Geert and Max in their letter, because the phase III trial will "enroll patients from nine countries in three continents. This gives the data a lot of weight and allows us to apply for marketing approval in many places in the world."