La Jolla's Kidney Drug Is Statistical Noise but Stock Soars

SAN DIEGO (TheStreet) -- A few weeks ago, I called La Jolla Pharmaceuticals (LJPC) a "hedge fund roach motel" and expressed doubts about the company's galectin inhibitor GCS-100, in part because the dodgy history of the drug and the target. 

Eh, I probably was too harsh with the "roach motel" line, but there are still a lot of unanswered questions about GCS-100 stemming from Monday night's release of results from a phase II study in chronic kidney disease patients.

La Jolla shares are up 74% to $18.97 Tuesday on what the La Jolla CEO George Tidmarsh described as "positive," "remarkable," "consistent," "predictable" and "important" GCS-100 data. That's a lot of adjectives! 

The phase II study enrolled 121 patients with chronic kidney disease and randomized them to placebo or two different doses of GCS-100: 1.5 mg or 30 mg. After 8 weeks of treatment, La Jolla says patients treated with 1.5 mg of GCS-100 demonstrated a statistically significant improvement in kidney function and reduced blood levels of galactin-3, the target of the drug. 

Victory declared.

What happened to patients treated with the higher 30 mg dose of GCS-100. Basically nothing. These patients had almost no change in kidney function and a large increase in blood levels of galectin-3. The low dose of GCS-100 works but the higher does was totally ineffective. That's called an inverse dose response and it's uncommon and strange. GCS-100 is designed to knock down the galactin-3 protein and thereby improve kidney function, but a high dose of the drug did exactly the opposite. 

These are what the primary endpoint data on GCS-100 look like graphed:

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