@adamfeuerstein $QCOR What's your opinion on Synacthen rights acquisition fr. Novartis?— hakahaka (@hakahaka) June 11, 2013I have rarely weighed in on the bull-bear debate that rages over Questcor Pharmaceuticals ( QCOR). Generally, I view Questcor's business model -- with respect to Acthar pricing and marketing -- to be slimy but smart and legal. Questcor identified loopholes and gray areas within the law and took advantage of them to make a lot of money off an old drug. Questcor is not the first drug company to operate in this manner and it won't be the last. In the past year, Questcor's Acthar marketing practices have come under a lot of scrutiny from insurance companies, some of which are pushing back. At the same time, Acthar sales continue to grow, which has helped Questcor's stock price regain almost all the losses suffered last fall. Along the same lines, I view the Synacthen acquisition as another smart and duplicitous move by Questcor management. By buying Synacthen from Novartis ( NVS), Questcor pockets a potential competitive threat to Acthar. The purchase agreement includes language to compel Questcor to develop Synacthen and seek U.S. approval. You're totally naive if you believe Questcor will ever do such a thing. The company will find a way to bury Synacthen in a deep hole, even if it requires paying financial penalties to Novartis. One year ago, this is how Questcor Chief Scientific Officer David Young spoke about Synacthen: With respect to Synacthen, a synthetic peptide marketed by Novartis in Europe and Australia. We believe unlikely to be competitive to Acthar. Synacthen is a fragment of ACTH called tetracosactide and is not an androgynous peptide of the body. It has the different amino acid sequence and a different pharmacology profile from Acthar Gel. Synacthen contains benzyl alcohol, which is toxic to children, it can potentially cause gastric syndrome, it can be fatal. Since Acthar Gel is widely used in children under 2 years of age for infantile spasm, Synacthen might face substantial safety and distribution issues in U.S. In addition, Synacthen would face the same regulatory and business issues discussed earlier for similar ACTH trials... This week, Questcor CEO Don Bailey sings Synacthen's praises: As an emerging leader in melanocortin research, we now have the opportunity with Synacthen to expand and accelerate our product development activities. We believe such efforts will enhance our expanding R&D program. In addition, this key acquisition provides an opportunity to initiate our presence in more than three dozen international markets, giving us an opportunity to reinvigorate Synacthen in these markets and providing us a platform for potential international growth. Adds Young: We intend to develop and seek FDA approval for Synacthen and are committed to developing this product not only in conditions different than Acthar but also in conditions where Synacthen would potentially provide a clinical benefit over Acthar. Proof that investors should think twice before believing anything that emerges from the mouths of drug company executives.
Pierre G. writes: Last month you had a piece about Celsion (CLSN) and I completely disagree with you. Yes, to the extent that Celsion management made a mistake using such a large study group but it would seem that when involving just the subgroup mentioned, data are substantially different. Have you changed your opinion here? Pierre is referring to my column -- Celsion's Shameless Spin Job -- published in April. Thermodox failed. End of story. Don't buy Celsion on the hope this liver tumor therapy can be resurrected. It won't happen. Celsion is trying to convince you otherwise, assisted by a small cadre of clueless stock promoters on Seeking Alpha, but don't listen to them. Thermodox doesn't work. The data don't lie: These curves plot progression-free survival (PFS) for the two treatment arms of Celsion's pivotal "HEAT" study: Thermodox plus radio-frequency ablation (RFA) versus RFA alone. PFS was the study's primary endpoint.