This week's Biotech Stock Mailbag starts with an email from Warren M. He writes, "Do you foresee an acquisition of Relypsa (RLYP) now that ZS Pharma (ZSPH) is being bought by AstraZeneca?"

I can't answer the Relypsa acquisition question. I would focus instead on the new, long-term treatment data from ZS Pharma's ZS-9 presented at last weekend's American Society of Nephrology meeting. The tolerability profile of ZS-9 took a hit with higher-than-expected rates of hypertension (high blood pressure) and peripheral edema (swelling of the arms and legs) reported in hyperkalemia patients.

By comparison, the safety and tolerability of Relypsa's Veltassa look better. At a minimum, the drugs are very competitive with each other. Relypsa needs to assuage investor concerns about the boxed warning on Veltassa's label regarding drug-drug interaction. A good commercial launch starting in January should take care of that issue. We won't know how well ZS-9 performs commercially because the drug isn't up for FDA approval until May. Relypsa has a head start.

AstraZeneca is buying ZS Pharma for $2.7 billion. Relypsa's market value today is less than $800 million with a hyperkalemia drug just as good if not better than ZS Pharma's ZS-9. I suspect that undeserving valuation gap will narrow over time.

Shawn P. writes, "Any opinion on the outlook for Sophiris Bio (SPHS) given the positive results from the BPH study?"

On Tuesday, Sophiris announced its experimental drug PRX302 met the primary endpoint in a phase III study in men with benign prostatic hyperplasia, better known as an enlarged prostate. PRX302, administered as a single injection into the prostate, demonstrated a 7.6-point improvement in the International Prostate Symptom Score (IPSS) total score compared to a 6.58-point improvement in the control arm. The one-point difference in IPSS improvement was statistically significant, Sophiris said.

I asked Dr. Ben Davies, a professor of urology at University of Pittsburgh, to assess the Sophiris PRX302 study results.

"This drug has the same effect as a sugar pill wrapped up in a secret-sauce of caramel flavored organic tea. Stated another way, it simply doesn't work and gives you painful urination 20% of the time," said Davies. [Those who know Davies from his Twitter feed @daviesbj are not surprised by his outspoken views.]

The biotech investing lesson here: Meeting the primary endpoint of a clinical trial with statistical significance doesn't always translate into a clinically meaningful result. In Sophiris' case, PRX302 falls short, says Davies.

Jameson L. writes, "Are you still a fan of Bluebird Bio (BLUE - Get Report) ?"

Yes, I am. More than a year ago, over beers at a Cambridge bar, I asked Bluebird CEO Nick Leschly if he was prepared for something to go sideways with the company's beta thalassemia gene therapy program. At that time, all the Bluebird data presented had been incredible. The Lentiglobin gene therapy was "curing" all the patients. But those stellar results weren't going to last forever. At some point, there would be a hiccup. A patient would relapse. A surprise side effect would surface. No drug works 100% of the time, so was Leschly ready for imperfection, I asked him.

Expecting Lentiglobin to be 100% effective -- to cure all patients -- wasn't realistic, Leschly told me. It was important for him and Bluebird to present the Lentiglobin data as is, without over-interpreting or making promises that couldn't be kept. There was too much unknown about gene therapy at that time to make assumptions based on a handful of beta thalassemia patients, he said.

I've met a lot of untrustworthy, overly promotional biotech CEOs in my time covering the sector. Leschly is not one of those guys. Investor expectations for Bluebird's gene therapy overheated in the biotech bubble. The company's stock price and market valuations got way ahead of the available Lentiglobin data. No doubt. Is that Leschly or Bluebird's fault? No.

The revelation last week that a group of beta thalassemia patients with the hardest-to-treat genetic mutation were still transfusion dependent despite Lentiglobin therapy was a disappointing development but not a fatal blow by any means. A majority of the Lentiglobin-treated patients remains transfusion independent, which is very encouraging. Bluebird will present updated data on its Lentiglobin beta thalassemia and sickle cell disease programs in three weeks at the American Society of Hematology annual meeting.

The Lentiglobin data won't be perfect, but that's expected now, right?

@adamfeuerstein thoughts on $ZFGN after numbers?

— Shimon Blumenfeld (@shimblum) November 10, 2015

The Zafgen (ZFGN) situation has calmed down some since a patient with Prader-Willi Syndrome enrolled in the beloranib phase III clinical trial died from a blood clot. Zafgen is working through the FDA-mandated partial hold on its clinical trials by screening patients carefully for blood clots. Zafgen is no longer treating patients in the randomized portion of this study and in a phase II study of severe obesity, choosing instead to analyze and announce results in the first quarter of next year.

Owning Zafgen today and holding the stock into next year's phase III study results is a bet that the beloranib benefit to Prader-Willi patients (if any is detected) will outweigh the thrombosis (blood clot) safety risk. That's a tough call to make. Is it smarter to wait for the actual data before getting involved in Zafgen? You might miss some upside if the study results are strong but you won't be incinerated if beloranib blows up.

Mean tweet:

@adamfeuerstein you bald headed f***

— Paul Lissy (@paul92108) November 10, 2015

Nice tweet:

@adamfeuerstein FWIW...I find your commentary thoughtful,helpful & the work of a realist. So many Ad Hominemers who need a scapegpoat here

— FairyFedmother (@BiptyBoptyJanet) November 10, 2015

Funny tweet:

The trolling of @adamfeuerstein is reaching epic proportions. Ppl that havent tweeted since 2009 r logging on 2 tell him 2go F himself $AVXL

— Ross (@VeeDub78) November 10, 2015

Francis B. writes, "Adam, do you have spare change to lend Northwest Biotherapeutics (NWBO) ?"

Ha! Francis must have read Northwest Bio's most recent 10-Q. The company ended the third quarter on Sept. 30 with only $5.4 million in cash. Northwest Bio's cash position became so dire in October that it needed to borrow $1 million from Cognate BioServices, the cell-processing company controlled by CEO Linda Powers. Northwest Bio also borrowed $400,000 from Les Goldman, senior vice president of business development and investor relations.

I can't recall a previous situation in which a cash-strapped company had to borrow money from its IR guy.

Northwest Bio borrowing money from Cognate is just as odd because the company already pays millions of dollars every quarter to Cognate for manufacturing services related to its cancer vaccines.

In the third quarter, Northwest Bio paid Cognate $7.1 million. In the first three quarters of the year, Northwest Bio's payments to Cognate totaled $28.4 million in cash, more than double the money paid in the same period a year earlier. Previously, Northwest Bio paid Cognate in cash and stock, but now, the payments are only in cash.

Cognate is majority-owned by a venture capital firm managed, in turn, by Powers and her husband. Ultimately, Northwest Bio's cash payments flow to Powers. Northwest Bio says fair-value contracts are negotiated with Cognate for manufacturing services but doesn't disclose details. Powers sits on both sides of the negotiating table as CEO of Northwest Bio and Cognate's principal owner.

Earlier this year, Northwest Bio shareholders sued the company, Cognate and Powers for alleged conflicts of financial interest tied to the payments made between Northwest Bio and Cognate. Northwest Bio denies the accusations and the lawsuit is ongoing.

Northwest Bio sells itself to investors as a pioneer in cancer vaccine technology, but if that's true, why does the company rely on emergency loans to keep the lights on?


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.