MannKind, Vical, GTx: Investors Predict Pivotal Clinical Trial Results

BOSTON ( TheStreet) -- Investor sentiment favors MannKind ( MNKD) and runs against Vical ( VICL) and GTx ( GTXI) as each company nears the reporting of results from soon-to-be-completed pivotal clinical trials.

On Friday, I conducted a survey -- promoted via Twitter -- asking investors to predict the outcomes of each company's phase III clinical trials. I wasn't looking for in-depth analysis, just a simple prediction: Would the trial results be positive or negative? A total of 348 people responded to the survey.

I also reached out separately to a dozen institutional healthcare investors, asking them the same question about the MannKind, Vical and GTx studies.

MannKind

Two phase III studies -- one each in type 1 and type 2 diabetics -- of MannKind's rapid-acting, inhaled insulin Afrezza are underway. The company says results will be reported this month.

Just over 50 percent of the investors predict positive results from the Afrezza trials, according to my reader survey. Thirty-one percent of respondents say the Afrezza studies will fail, while 19 percent either didn't know enough about the trials or didn't care to make a prediction. I voted along with the majority, predicting positive results.

Here's how the survey results look in a pie chart:

Of the 12 professional healthcare investors polled separately 10, or 83 percent, predicted a positive outcome from the MannKind studies. The other two investors chose not to make a prediction. None predicted failure.

The bullish sentiment picked up my surveys makes sense when you consider MannKind's stock price has been a tear for the past six months. If this is a run-up into expected positive results, we could see profit taking or selling on the news once Afrezza results are announced. MNKD Chart MNKD data by YCharts

MannKind is also the seventh-most shorted stock in the bio-pharma sector, with just under 29 percent of shares sold short as a percentage of the float. The MannKind short thesis is less about the risk of failed clinical trials and more focused on significant doubts about the company's ability to 1) get Afrezza approved; 2) find a marketing partner; and 3) generate meaningful revenue.

Vical

A phase III study of Vical's melanoma immunotherapy allovectin-7 will have results ready in August, the company said recently.

The survey says: 34 percent of respondents are predicting a positive result from the allovectin-7 melanoma study. A plurality of respondents -- 45 percent -- call the study a failure; while 23 percent chose not to make a prediction. I'm also predicting failure for allovectin-7 and discussed my reasons to be bearish in a column published in May.

Here are the results in pie-chart form:

My panel of 12 professional healthcare investors is even more negative on Vical, with 11, or 93 percent, predicting the allovectin-7 study will fail. One investor chose not to make a prediction. None forecast positive results.

Until the past week or so, Vical has not acted like a stock with positive trial results looming. VICL Chart VICL data by YCharts

In the past two months, Vical's short interest has increased 32 percent and currently stands at 12.7 million shares.

GTx

GTx is conducting two phase III studies of enobosarm, a selective androgen receptor modulator (SARM) in lung-cancer related muscle wasting. The company's official guidance is to report results in the third quarter but the data are expected to be announced in August.

The survey says: The enobosarm studies will fail, with 39 percent of respondents predicting negative results. Almost the same number of people -- 38 percent -- had no opinion on the outcome of the studies; while only 24 percent predicted positive results. I predict failure for enobosarm's clinical trials, in line with a recent , bearish column about the drug and its previously conducted phase II study.

Here's the pie chart:

My panel of 12 professional healthcare investors are equally unimpressed with GTx and enobosarm. Seventy-five percent predicted negative results versus 17 percent predicting a positive outcome. One investor chose not to respond.

Here's a look at GTx's stock chart for the past six months: GTXI Chart GTXI data by YCharts

GTx's short interest is relatively modest at just over 3 million shares.

-- Reported by Adam Feuerstein in Boston.

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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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