@ adamfeuerstein Will Vical be Feuerstein-R Rule breaker when results come 3rd qtr? yervoy synergy possible too seekingalpha.com/article/143551...— K. Rudolph (@scientwest) May 15, 2013I'm not optimistic about Vical ( VICL) or its skin cancer immunotherapy Allovectin. I believe failure will be the most likely outcome of the phase III study when results are announced in the third quarter. Before I explain the fundamental bear thesis on Allovectin, let's look at what the Feuerstein-Ratain Rule says about Vical's future. Remember, the F-R Rule says phase III studies of cancer drugs have a zero percent chance of success (100% failure rate) if the company sponsoring the study has a market cap of $300 million or less, measured four months before the study results are announced. Vical is guiding to Allovectin results in the third quarter, so I'm going to use August 15 -- the midpoint of the third quarter -- as the announcement date. Dial back four months to April 15 and Vical's market value was $380 million. Looking more broadly, Vical's average market cap for April was approximately $340 million. $340-$380 million is greater than $300 million, therefore Vical's Allovectin study is outside the dead zone as defined by the F-R Rule. That's a positive, but... Ziopharm's ( ZIOP) F-R Rule market cap was $350 million heading into its phase III study of palifosfamide. That study failed, so if Vical is like Ziopharm (and the two are similar, market cap-wise and both companies went into phase III trials without a partner) then Vical bulls shouldn't be too optimistic. The F-R Rule states companies with market caps in the $300 million to $1 billion range had a 17% success rate with phase III cancer drug trials. I was conversing with some Vical bulls on Twitter last night, during which @GaltGhost tweeted this:
@ adamfeuerstein @ lottopredictor $VICL I have bet seven figures and possibly my life on A7 success.— J. Galt (@GaltGhost) May 16, 2013I understand optimism and betting to win on a major stock-moving catalyst like phase III trial results, but this is too much. Somebody explain risk management to @GaltGhost and quickly! Alright, why will the Allovectin study fail? Here's the bottom line: Vical enrolled the healthiest melanoma patients ever into the Allovectin study. I know that sounds weird. How can you be healthy with skin cancer? What I mean is that on the melanoma severity scale, the patients in the Allovectin study are much less sick than patients enrolled in other melanoma studies and should be expected to live a long time with their disease.
How many times do we have to be unimpressed with this $SGMO HIV data before they quit?— Andrew G. (@BioDueDiligence) May 15, 2013In early March, I wrote a column calling Sangamo BioSciences' ( SGMO) HIV gene therapy SB-728 a valuation prop. In the column, I argued that this "functional cure" for HIV is more hype than reality, but it's also the only drug Sangamo has in the clinic. Without SB-278, the company would be hard-pressed to maintain its $500 million market value. Fast forward two and a half months and Sangamo's stock price is down 20% in a raging biotech bull market. Sangamo presented some new data on SB-278 Wednesday, described as "remarkable" by the company's chief medical officer. The market appears to disagree, and for good reason. The graph below is from an HIV patient described as a responder to SB-278:
Sit down, I'm about to say something nice about $SPPI: Belinostat ph 3 data pretty good.— Adam Feuerstein (@adamfeuerstein) May 15, 2013Insane, I know, which is why I received some responses like these:
@ adamfeuerstein It seems you started to drink early tonight, LOL— Aric Best (@thegunnerab) May 15, 2013
@ adamfeuerstein what'd you do w/ the real Adam?(j/k)— Red Acre Investments (@redacre) May 15, 2013
@ adamfeuerstein Raj finally hacked Adam's twitter.— Jason (@JasonMilano8) May 16, 2013All jokes aside, the belinostat data released Wednesday night as part of the ASCO abstract dump do compare favorably to competing drugs used to treat peripheral T-cell lymphoma such as Celgene's Istodax and Spectrum's other PTCL drug Folotyn. In the single-arm pivotal study, the overall response rate to belinostat was 26-28%, which matches Istodax and is just a tiny bit lower than Folotyn. Median duration of response to belinostat was 8.3 months, which is on the low end compared to Istodax (12 months) and Folotyn (10 months.) Belinostat's strength is safety and tolerability. Patients in the study reported low rates of thrombocytopenia (13%), neutropenia (13%) and anemia (10%) -- much improved over Istodax and Folotyn which generally cause thrombocytopenia and neutropenia in 40% and 30% of patients, respectively. Anemia is reported in about 24% of patients for both drugs. If these belinostat data hold up, FDA approval seems likely. The market opportunity in PTCL is small, however, and belinostat, if approved, will cannibalize Foltyn sales to some extent. Still, let's not start raining on Spectrum's parade just yet. -- Reported by Adam Feuerstein in Boston. Follow @AdamFeuerstein