Unanswered Questions Support a Short Position in Introgen

On February 20, 2007 Introgen (INGN) issued a press release denouncing “recent internet articles” as false and misleading. The press release was brief and failed to identify any specific statements made in those articles that it alleges are false and misleading.

On February 27, 2007, Introgen issued a second press release in response to an SEC action against a hedge fund that had improperly shorted Introgen shares over three years ago (in November 2003) in connection with a private placement of Introgen stock. Introgen indicated that it expected further legal actions related to this hedge fund’s activities and what it referred to as “associated matters” given its belief that the announcement of the SEC action and other recent events are not coincidental. In other words, Introgen has suggested a conspiracy is afoot a la Overstock and Biovail.

One would expect that Introgen will eventually respond in detail to the alleged false and misleading statements with more than a perfunctory denunciation although they have failed to do so to date notwithstanding the fact that they consider “recent activities” serious enough to issue press releases. In that vein, the following questions seem pertinent to Introgen’s investors and I therefore direct them to Introgen management:

• You claim that false and misleading statements have been made about your company. What statements are false and what statements are misleading? You previously claimed that the phase 3 trials were conducted under a Special Protocol Assessment. Is this true or false?

• You now claim that you have an agreement with the FDA under their protocol assessment program (lower caps). What is a protocol assessment program? How is a protocol assessment different than a!
Special Protocol Assessment?

• What is an "invited pre-submission"? Did the FDA actually come to you and ask YOU to submit information that you did not previously plan to submit? In what form did the invitation come?

• What is the difference between the actual submission of the first section of a BLA and a pre-submission of an actual first section of a BLA?Did you or did you not submit the chemistry and manufacturing section of your "proposed" BLA to the FDA as you claimed to have in November 2004? Why does the FDA apparently have no record of the submission of a chemistry and manufacturing section for any Introgen product?

• Why do you title press releases with categorically misleading statements such as you did in August 2002 when you said you had submitted your filing for Advexin in Europe? In fact, you have not by your own descriptions submitted anything to any regulatory agency with regard to Advexin that comports w!
ith standard regulatory requirements but rather are related informal interactions with agencies such as invitations and iterative dialogue. Is that correct?

• What is the status of enrolment in the Advexin phase 3 trials? You claim that there are competitive concerns and as such you can't disclose this information. There is not a single investor I know of who believes this is the case. And if there are competitive concerns, spell them out in detail. Disclosure of enrolment statistics is among the most fundamental issue you are facing given the age of these trials, the interminable enrolment process and the importance of Advexin’s phase 3 trials to your company and most importantly your shareholders.

• You claimed in May 2005 that a manuscript describing results from your phase 2 trials was in process and as such you couldn't disclose too many details about the phase 2 trials and your subpo!
pulation. It will soon be May 2007. What is the status of the manuscript? Will it be published in 2007? Will it ever be published?

• You claim that the FDA has agreed to the use of your biomarkers for the analysis of your phase 3 trials. What specifically does this mean? General terms are not acceptable to your investors.

• Since you intend to evaluate your phase 3 data with your biomarkers and since the trials are apparently less than 50% enrolled and since you have not terminated these trials you must be planning on only enrolling patients with the p53 biomarker. Have you submitted a protocol revision? Will you continue to enroll p53 negative patients just for kicks and giggles?

• You claim that the FDA has agreed to review the Advexin BLA in the context of your biomarker analyses for registration of Advexin. What specifically does this mean? Has the FDA allowed you exclude all efficacy data related to patients treated with Advexin that are not p53 positive?

• In your 2004 10-K you claim that you filed a SOPA under Section 506(c) of the FDCA. The FDA's standard operating procedures REQUIRE a response to a SOPA request within 60 days of submitting the required paperwork. Did the FDA deny or allow your SOPA request. And why does the FDA have no record of your SOPA request? Is it true that you did not disclose the fact that the FDA did not accept your SOPA request?

• You claim that the FDA has approved numerous drugs based on phase 2 data on an accelerated basis? This is a true statement. However, are you aware of a single drug or biologic ever approved on an accelerated or even a standard basis based on a retrospective meta-analysis of three distinct phase 2 trials?Has an interim analysis of any phase 3 trial ever been considered confirmatory by the FDA?

• Has the FDA ever approved a gene therapy agent and is the FDA likely to be more or less rigorous!
in its analysis of your data than it would were Advexin not gene therapy?

• Has the FDA ever approved any drug for any condition based on a retrospective analysis of ANY data, including phase 2 data or phase 3 data? How many times have you looked at the phase 2 data?

• Let's assume for your benefit that these interim looks (even though they weren’t actually interim looks) were actually occurring in real time during the course of the phase 2 trials and pursuant to a protocol as opposed to years after the trials completed. How much alpha would you have already spent given the relentless dredging of the data?

• FDA guidance on biomarkers forcefully repudiates all of your claims as far as the applicability of your biomarkers to a regulatory decision. Why is the FDA agreeing to handle your proposed BLA differently than they intend to address every other BLA or NDA with regard to biomarker analyses? Who has granted you a dispensation and is it written?

• Why have you repeatedly told investors, year after year, that your BLA would be filed within 12 months and subsequently failed to file your BLA?You have consistently led investors to believe that partnership discussions are at the term sheet stage. This has been going on for years. Why hasn't an actual contract been signed and what is the current status of your partnering discussions?

• You presented an abstract at AACR titled "Abnormal over expression of p53 is a predictive molecular biomarker of Advexin (adenoviral p53) efficacy in recurrent squamous cell carcinoma of the head and neck (SCCHN)". The abstract indicates that "the subpopulation of patients identified by this biomarker has a poor prognosis and is generally the most resistant to conventional treatments." The question is what exactly is the subpopulation? Do you mean the subset of patients with p53 positive tumors? And if so, what data do you have besides your own that confirms that this subpopulation is "most resistant" to conventional treatments as you claim? And what is the definition of a "conventional treatment"? Do you mean the subpopulation of patients for whom you had access to evaluable tumor samples and the subpopulation of this subpopulation that had known clinical outcomes?

• What is the current standard of care for the subpopulation of patients you’ve identified? What is considered “conventional” today as opposed to conventional in 1999? And who defined "abnormal" with regard to over-expression levels not only for p53 but also for the other markers you studied? To the extent that Introgen believes an abnormality is ≥20% of positive cells what data do you have to support this? In fact, how you defined an abnormality for the other markers is critical so why don't you tell us how you defined these other markers in terms of their abnormality?

• Did you also look at the data based on other definitions of an "abnormality" in terms of over expression or did you predefine abnormal levels of expression and apply that threshold prospectively? Prior to your self-described biomarker breakthrough, you identified a set of "prognostic factors most likely to predict patient benefit from administration of Advexin gene therapy", which is traditionally referred to as "efficacy". Have you given up on these prognostic factors and if so why? Or are you combining these prognostic factors with the p53 biomarkers to evaluate a subpopulation of patients with evaluable tumor samples with certain prognostic factors with a certain type of SCCHN?

• And since you conducted three distinct phase 3 trials with multiple dosing schedules, multiple permutations of baseline characteristics, refractory and non-refractory patients, patients with tumor sizes less than and greater than 7.5cm, patients who were subsequently treated with chemotherapy and patients that were not, patients who received high doses and patients that received low doses of Advexin, what exactly is the population of patients that you believe Advexin is most likely to benefit?

• What will you propose for labeling of Advexin?

• Over the course of many years you have presented an untold number of subsets of patient characteristics that support your argument that Advexin works. For the T-201 high-dose trial you've reported data for refractory patients, patients with tumor sizes greater than 7.5cm and patients treated with subsequent chemotherapy. For the T-202 low dose trial you've reported results for subsets of patients based on tumor size and subsequent chemotherapy. For the T-207 high dose study you've reported subset results for both refractory patients and patients subsequently treated with chemotherapy. After you were finished with these subset analyses, you combined all of the data. You then reported data at AACR comparing the high dose and low dose groups and for a subset of patients that were treated subsequently with chemotherapy.

• In 1999 you reported data for a subset of refractory patients. In a December 2004 press release you reported data for an undisclosed subset of patients and for a subset of patients with disease control and for a subset of patients with an objective response. In May 2005 you reported data from another entirely different subset that you would not disclose. I stopped counting after May 2005 due to nausea but since then you’ve introduced the biomarker data and several other manifestations of response rates based on other subsets and prognostic factors. The question is when is it going to end and when are you going to file a BLA?

• Have you abandoned publication of the manuscript which you promised would set forth in detail the prognostic factors that identified “patients most likely to respond” to Advexin?

• Finally, would it make more sense to allow the naysayers you have denounced to ask questions on your next conference call as opposed to biased analysts who are mere advocates and a private investor named Ed Stark who repeatedly expresses nothing more than “how incredible” your progress has been? Mr. Stark and these analysts appear to be the only individuals on the planet who believe that a 7-year analysis of phase 2 data is progress.

Disclosure: Author has no position in INGN