Does Vasogen's Verbiage Inspire Your Confidence?

Vasogen (VSGN) announces Q2 earnings. One reads the press release, and reads and reads. Most corporations lead with the bottom line . . . Vasogen trumpets the fact that they still have cash available. They eventually get to the bottom line, which does have losses. The company is unintentionally signaling that balance sheet considerations outweigh operations such as developing new drugs and therapies. But they want you to believe that they are able to survive and reach the next level.

In the same press release, they echo some previous comments that they made on June 27 about meetings with the FDA regarding their studies on Celacade and the treatment of chronic heart failure. Essentially, they are very happy with their claim that the FDA is recommending the use of a statistical sampling technique which will allow them to avoid costs. This is important as they will need to make a pre-market approval confirmatory study.

At the same time ,they are also making some significant changes in the executive suite. You do not change horses just before the finish line. The stock has drifted downwards and is trading near its 52 week lows. The company is blowing smoke until it figures it out yet again. Read this quote from Vasogen's verbiage-laden press release and decide whether it inspires confidence.

On June 27, 2007, we announced the outcome of a meeting with the Food and Drug Administration [FDA] regarding the next steps in the development of our Celacade technology for the treatment of chronic heart failure in the United States. During the meeting, we discussed with the FDA the results of the ACCLAIM study, with a particular
focus on the 689-patient subgroup with NYHA Class II heart failure. As a result of this meeting, the FDA has strongly recommended that we conduct a confirmatory study to support a Pre-market Approval [PMA] filing and also recommended that we consider utilizing a Bayesian
statistical approach to designing the confirmatory trial. The Bayesian approach involves a specific trial methodology that allows utilization of prior trial results with a confirmatory study to obtain additional information regarding efficacy and safety and has the potential to substantially reduce the number of patients required for a confirmatory study, as well as the cost and duration. Having received the FDA's input, we are now in a position to fully evaluate
our options with respect to a confirmatory trial that could potentially be smaller than the 689-patient NYHA Class II subgroup of patients in ACCLAIM if we elected a Bayesian approach. We are continuing our ongoing dialogue with the FDA, as well as consulting
our statistical experts and other advisors to review trial design options.