Biotech Stock Mailbag: Celldex, TG Therapeutics, Sarepta

TOWN, STATE ( TheStreet) -- Welcome to this week's Biotech Stock Mailbag. Before I get to your emails and tweets about Celldex Therapeutics ( CLDX), TG Therapeutics ( TGTX), Sarepta Therapeutics ( SRPT), ImmunoCellular Therapeutics ( IMUC) and Osiris Therapeutics ( OSIR) (A lot of "Therapeutics" this week!), I have a request:

Please enter my FDA Drug Approval Contest. It's a ton of fun. The more entries I get, the more data I have to crunch about sentiment for upcoming drug approvals that I can share with you. I'm looking for at least 100 entries before end of trading today. I'm almost there, so if you haven't entered yet, check out my column on the contest and post your entries in the comment section. Who knows, you may just win!

Moving on to your emails and tweets:

@ColfaxCapital asks, "What are your thoughts on $CLDX? In less sick population, ORR should be attainable; PFS goal might be aggressive, unknown?"

Colfax is referring to Celldex Therapeutics and the design for the accelerated approval trial disclosed Thursday morning for its experimental monoclonal antibody drug conjugate CDX-011.

Celldex plans to enroll approximately 300 patients with triple-negative breast cancer with tumors that also over-express the protein GPNMB. The antibody portion of CDX-011 hones in on GPNMB-expressing tumors. The patients will be randomized 2:1 to receive treatment with CDX-0-11 or Roche's Xeloda (capecitabine.) The primary endpoints are overall response rate or progression-free survival. Celldex says it will be able to submit for FDA approval (accelerated approval) as long as one of the two endpoints are met.

Celldex chose not to pursue a Special Protocol Assessment (SPA) agreement with FDA for the trial because regulators were copacetic with either overall response (with durability) or PFS as clinically meaningful endpoints given the lack of current treatment options for triple-negative breast cancer, Celldex chief medical officer Tom Davis told me in an interview. Pfizer ( PFE) employed "either/or" primary endpoints for its pivotal trial of the lung cancer drug Xalkori, so there's precedent for this design, added Davis.

The study will begin enrolling patients in the second half of the year, with accrual taking approximately 18 months. Top-line data will likely be approximately nine months later.

In addition to having triple-negative breast cancer that over-expresses GPNMB, the patients in the study will also be resistant to prior treatment with anthracyclines and taxanes. In other words, the patients in the accelerated approval trial will enter with less advanced disease than the patients who participated in the previous phase II study of CDX-011. I wrote about the results from the CDX-011phase II study when they were presented last December.

Celldex powered the new study with the assumption that Xeloda-treated patients (the control arm) will have a 15% response rate and PFS of 4 months. The company believes CDX-011 can double response rate to 30% and improve PFS by 2.25 months.

As I write this column on Thursday morning, Celldex shares are down about 5%. Hard to attribute the selling to anything specific, but I know the timelines for the '011 trial are a bit longer than what management told investors during the roadshow leading up to last month's stock offering.

The trial is certainly not without risk, which could also be weighing on the stock. Earlier-stage patients should, theoretically, respond better to CDX-011 but then it's more difficult to use results from the completed CDX-011 trial as an accurate comparator. And don't forget, the old trial was quite small.

Cancer drug expert, consultant and blogger Sally Church (@maverickNY) pointed to this study (via Twitter) of Avastin in second-line triple negative breast cancer patients. Median PFS was 6 months for Avastin plus chemotherapy versus 2.7 months for chemotherapy alone.

Church tweeted:

"If Avastin can achieve 6 mon after taxanes in TNBC, then comparing 011 to capecitabine 2nd line will need to match that."

Lots to think about in terms of handicapping the results from the CDX-011 trial. There's also plenty of time.

Celldex is more than just CDX-011. On its call Thursday morning, the company said to expect patient enrollment in the phase III study of rindopepimut in brain tumor patients to wrap at the end of the year. The first interim look at data from the study will take place in mid-2014.

An earlier-stage drug candidate, the complement inhibitor CDX-0135, has also generated some investor interest. A small pilot study in Dense Deposit Disease should have data by year's end.

Simon R. asks, "What do you know about TG Therapeutics?"

Not much, except the bulletin board stock has generated some Twitter buzz over its PI13K delta inhibitor TGR-1202. Investors have fallen in love with companies developing PI13K inhibitors for various blood-related cancer and inflammatory diseases. PI13K refers to the molecular pathway that the drug blocks. Infinity Pharmaceuticals' market cap approaches $1.8 billion and growing due largely to its P113K inhibitor INFI-145. Gilead Sciences has idelalisib. And then there's Pharmacyclics (market cap $6.5 billion) and its BTK inhibitor ibrutinib, which is related mechanistically to P113K inhibition.

TG Therapeutics' market cap is under $100 million, so the stock looks cheap relative to its P113K competitors. Makes total sense. It's also a bit early to conclude anything about the efficacy and safety of TG-1202 relative to its competitors, most of which are well ahead in clinical trials. Data presented last year by the company showed TG-1202 to be roughly comparable to similar drugs in terms of selectivity to the molecular target. A phase I study of TG-1202 in blood cancers started in January.

I'd be remiss if I didn't also mention the provenance of TG Therapeutics because it will surely give institutional investors with long memories some pause. TG Therapeutics was formerly Manhattan Pharmaceuticals, a Lindsay Rosenwald creation. TG's current CEO is Mike Weiss, a longtime Rosenwald lieutenant who was previously in charge of Keryx Pharmaceuticals ( KERX). For every drug out of Rosenwald's stable that shows promise (Keryx's Zerenex) there are many more that end up duds.

It's an issue to think about with respect to TG-1202. Owning a drug in with a hot molecular target is not the same as developing that drug successfully. In the absence of clinical data and in the current bull market, perhaps all that matters is TG Therapeutics' cheap stock relative to its competitors. At least that's what I hear from the biotech trading Twitterati.

@MarvinOLicious tweets, "Do you think $IMUC is hiding something by reporting that of the 278 patients, only 124 qualified to be randomized?"

ImmunoCellular Therapeutics isn't hiding anything but it's silly to talk about 278 patients "enrolled" when, as you said, only 124 were actually randomized into the phase II study of its brain tumor vaccine ICT-107.

The 278 patients represent the total number screened for entry into the trial. Of that, 124 patients were accepted and randomized to ICT-107 or placebo. More than half of screened patients were excluded from the trial because they lacked specific antigens deemed favorable to ICT-107 vaccine.

ImmunoCellular enrolled 124 patients, not 278. Saying otherwise just creates unnecessary confusion. Interim results from the study are expected by the middle of the year, with final results at year's end.

@robpichardo asks, "What would cause $SRPT not to file for AA accelerated approval.? Or, does FDA have to give permission to even file? Trying to determine upcoming risk."

Technically, Sarepta can seek accelerated approval for eteplirsen regardless of the FDA's recommendation. Filing when FDA says not to would be stupid because the drug would be rejected. Time would be wasted and credibility destroyed. So, I hope Sarepta brings a convincing case to the FDA for accelerated approval and the agency concurs. That's the best outcome. I also hope Sarepta is smart enough to not cross the FDA if it says don't file.

@Ultimate_disc tweets, "I can't believe you haven't opined on $OSIR."

Osiris Therapeutics! My favorite stem-cell stock. Let's see, Osiris reported 2012 product revenue of $7.8 million, which means the stock trades at a trailing price-to-enterprise value ratio of 25. Over-valued! Care to look ahead? Okay, let's say Osiris does $30 million in revenue from its stem-cell band-aid products this year (it won't, but bulls can dream.) At the current stock price, Osiris will trade at almost seven times sales. Still over-valued.

Osiris claims it can generate $75-$130 million in annual sales from its stem-cell band-aids (When? The company doesn't say.) Sales in the fourth quarter were $2.9 million. Call me unconvinced.

Remember Prochymal, heralded by Osiris as the "WORLD'S FIRST APPROVED STEM CELL THERAPY!!!!?" Sales since approval in Canada and New Zealand last year: Zero. Plans to seek U.S. approval? On hold. Partners? None.

I'm still waiting for Osiris to answer the questions about missing data from its Prochymal cardiac trial.

Osiris shares rallied on Wednesday's fourth-quarter financials, which reminds us all that CEO Randy Mills is really just a caretaker for a group of Swiss investors who control most of the shares. How do I know this? Mills admitted it last year!

Conny is mad, reasons unknown. "Why don't you go back to school or try to get an internship somewhere and forget about trying to be an analyst. You obviously are not qualified to do that. And I'm sorry to say you're not a journalist either. Maybe a McDonalds franchise at a busy train station might be the right thing for you. Think about your future. Stay away from the internet and try to put some meaning into your life."

-- Reported by Adam Feuerstein in Boston.

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