On December 20, 2012, the FDA will hold an advisory committee meeting for Hemispherx Biopharma's (NYSEMKT:HEB) Ampligen. The committee will evaluate whether Ampligen is a safe and efficacious treatment for chronic fatigue syndrome (CFS). After reviewing relevant medical and scientific data, we believe Ampligen will not garner support from its advisory committee. In particular, we have concerns regarding Ampligen's phase III clinical trial data as well as Hemispherx's response to the complete response letter it most recently received from the FDA. If the advisory committee votes negatively, Hemispherx's stock price may precipitously decline.
CFS, also known as myalgic encephalomyelitis, is a debilitating medical disorder characterized by severe fatigue that often leads to substantial reduction in physical activity. CFS commonly occurs with other illnesses, such as fibromyalgia, depression, and chronic pelvic pain. Although estimates of the condition's prevalence vary widely, the Centers for Disease Control report that CFS currently affects more than one million people in the United States. Furthermore, CFS has an economic impact in the US of more than $9 billion per year, making its financial burden comparable to that of infectious diseases (~$10 billion) and nervous system disorders (~$6 billion). Current treatments for CFS include cognitive behavioral therapy, graded exercise therapy, and depression medication. However, despite receiving treatment, patients usually do not recover. Given the severity of CFS and the lack of effective therapies, there is a strong need for novel treatment options.
Ampligen improves CFS symptoms
Ampligen, also known as rintatolimod, is an experimental double-stranded RNA drug. It is thought to treat CFS by binding to an immune-cell receptor named Toll-like receptor 3. Consequently, Ampligen may stimulate an immune response and target any underlying viral infection causing CFS. In Ampligen's phase III trial, 234 CFS patients were evaluated for how long they could walk on a treadmill. Relative to patients receiving a placebo, patients treated with Ampligen walked 21% longer and voluntarily reduced their use of other CFS drugs. However, these results barely exceed standard limits for statistical significance.
Ampligen's phase III trial has shortcomings
Although Ampligen holds promise as a treatment for CFS, its phase III trial lacks sufficient robustness to determine whether the drug merits FDA approval. Two insufficiencies stand out. First, at the beginning of the study, patients were evaluated to establish baseline measurements for exercise tolerance. These data were subsequently used for same-patient comparisons. Unfortunately, however, discrepancies were not properly resolved. When two baseline measurements differed beyond a narrow threshold, a third measurement was taken. Of the three values, one was discarded, assumed to be an outlier. This practice smoothes variances and, consequently, can make results appear substantially better than their underlying data support. Even with smoothed data, Ampligen's phase III trial results are only marginally significant from a statistical standpoint.
Additionally, in Ampligen's phase III trial, male-to-female ratios differed between the placebo and Ampligen groups. The placebo group included 77.8% female patients, contrasted to the Ampligen group, which included only 67.5% women. Relative to men, women are more prone to CFS and more likely to have comorbid fibromyalgia or multiple chemical sensitivity. Thus, men and women may be distinct in the presentation of their CFS or in their response to Ampligen. An acceptably thorough study would have allowed for patient segmentation by gender, and possibly by severity of disease as well. The trial's unbalanced arms and small set of patients preclude a finer--and potentially more convincing--analysis of Ampligen's efficacy.
Hemispherx circumvented the FDA's pre-approval recommendations
The FDA previously rejected Hemispherx's new drug application for Ampligen after lengthy postponements, citing a lack of "credible evidence of efficacy." In Hemispherx's most recent complete response letter, the FDA recommends a minimum of one additional 6-month, 300-patient study, as well as multiple rodent carcinogenicity studies. Contrary to these suggestions, Hemispherx chose not to perform additional clinical studies ahead of its upcoming advisory committee meeting. Given the highly hypothetical nature of Ampligen's mechanism of action, further clinical trials could have allayed notable safety concerns. For example, immunomodulatory drugs such as Ampligen may induce autoimmunity and generate long-lasting immune effects, including decreased resistance to cancer and infection.
In November, the risk of autoimmunity prompted an advisory committee to deliver a negative vote for Dynavax's (NASDAQ:DVAX) hepatitis B vaccine, whose adjuvant (i.e. immunomodulatory factor) is a nucleic acid similar in composition to Ampligen. As Beacon VP Investments discusses in an earlier article, immunostimulatory nucleic acids are associated with serious autoimmune risks. Notably, however, Dynavax could objectively quantify some of these safety risks because it had more than four-times as many patients in its phase III trials as did Hemispherx. Dynavax also directly addressed potential safety concerns, which Hemispherx has not meaningfully done with its publicly released information. In other words, Dynavax had a relatively strong argument for the safety of its nucleic acid treatment, yet faced resistance from its advisory committee. Hemispherx may see similar, but more pronounced, concerns related to the safety of Ampligen.
It is not well understood how Ampligen functions, nor what long-term effects the drug has on patients. Hemispherx's published phase III trial data do not provide statistical credibility to claims on Ampligen's efficacy. Furthermore, the trial's small size severely limits conclusions regarding safety. Usually a drug enters its advisory committee meeting with reasonable clarity regarding efficacy or safety. This is not the case for Ampligen. In our opinion, Hemispherx has not proven either component. Thus, we recommend that investors display appropriate caution ahead of this advisory committee meeting.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Beacon VP Investments is a team of analysts. This article was written by Judy Liu, one of our team members.