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  • FDA Setbacks Make Vivus a Buying Opportunity [View article]
    I've apologized to Tro. I thought this was a more recent article. My choice of language, most especially relating to the 10Q which was not published at the time that this article was written, was out of line.
    May 18, 2011. 02:26 PM | Likes Like |Link to Comment
  • Vivus Planning for Failure in Qnexa Birth Defect Study [View article]
    The study shows a 4.6% rate of birth defects for women taking topiramate during pregnancy vs. 2.4% for untreated epileptic women that is not statistically significant. "No association", as is the wording in the JAMA article, means simply 'no statistically significant association', not 'we can rule out an association'. Basically, the non-statistically significant troubling trend (to go along with several other troubling trends in other studies) is all you can pull out of this. Bulls would be wrong to say this is good news for the FORTRESS study.

    To date, however, no one has looked specifically at the 100 mg topiramate dose in migraine patients, and the new study doesn't change that. I would say there's some possibility of clean data here, but it is unlikely. It's also unlikely that the numbers will be there to rule out an increase in oral cleft birth defects. It's also suspicious that Vivus hasn't commented specifically on the FDA's comments on the study design viz. the study's primary and secondary endpoints.

    Owning a long-term position in Vivus is a risky play, anyone who tells you otherwise should be looked at with suspicion. But the potential payoff if the drug reaches blockbuster status in a relatively vacant obesity field will keep the most speculative among us interested in the stock.
    May 18, 2011. 11:21 AM | Likes Like |Link to Comment
  • FDA Setbacks Make Vivus a Buying Opportunity [View article]
    I would be remiss if I failed to point out a few things...

    1) The Accutane point is mostly moot. Accutane is taken for up to 6 months in typically teenage boys and girls. Qnexa will be taken primarily by older patients in the prime of their child-bearing years for long-term dosing (anyone who argues the long-term point clearly hasn't listened to the Qnexa, Contrave, and lorcaserin FDA panels). They're very very different in regards to pregnancy risk. Fifteen women in the Qnexa phase III trials became pregnant regardless of the contraception requirement in the study design. And Vivus never discussed this option in it's most recent conference calls. Eliminate this from your argument or you WILL be misleading people.

    2) "Born from one lone study" does not mean other studies have not taken place - and furthermore you misidentify which study caused the FDA's concerns. You referenced the UK study, but there was also a North American study that found an increase in oral clefts in babies born from women taking topiramate (and this one caused the FDA concerns that you are referring to). There was also a study examining topiramate use from 52 pregnancies in Israel showing an increase in 'major anomalies' but was not statistically significant (p=0.090). Make no mistake, there are several studies that show at least concerning trends towards an increase in birth defects. Again, without all the information, you're misleading your readers.

    3) The FORTRESS study will almost primarily focus on the 100 mg dose level. The wording changed from the conference call (which I'm assuming you listened to) to the most recent 10Q (which, based on your wording, I'm assuming you didn't read). From the 10Q:

    "As part of this meeting, the FDA requested that we assess the feasibility of performing a retrospective observational study utilizing existing electronic medical claims healthcare databases to review fetal outcomes, including the incidence of congenital malformations and oral cleft, in the offspring of women who received prophylaxis treatment with 100 mg of topiramate for migraine during pregnancy, or the Feasibility Assessment."

    It's OK if you missed that wording; the company did a poor job of saying that explicitly themselves in their quarterly conference call. But this point is a strength to your bull thesis, so you should drive it home a bit more. As far as I've seen, there weren't any published cases in which the 100 mg dose level gave birth defects, but no one has really looked that deeply so we'll find out for sure soon enough. So I'll give you that the FORTRESS study may stand a decent shot of giving clean data at 100 mg. But will just the 100 mg level be OK? Will the FDA want to see clean data at 200 mg as well to establish a margin of safety? Will there be enough pregnancies to rule out birth defects at all, statistically speaking? How will the study manage titration time lines? Etc etc etc. It's a very risky study to execute properly and yield solid statistically significant data.

    Mid-dose approval may actually be the 'Goldilocks' dose level with decent enough efficacy and low risk of birth defects but we simply don't know what the data will say (few women on ~50mg topiramate so virtually no data) and we don't know what the FDA will make of it. Again, risky.

    Call Vivus what it is: A highly risky play that is only suitable to the most speculative and least risk averse investors. Given the solid efficacy that you point out and lack of good treatments for obesity, Qnexa could command as high as a $2B valuation if everything goes according to plan. However, given what is known with respect to birth defects associated with topiramate and the market challenges associated with obesity medications, that outcome is solidly unlikely. If this sort of play fits your investing style then, please, have at it, but to say it's an unqualified 'buying opportunity' is misguided and bordering on reckless.
    May 17, 2011. 10:51 PM | Likes Like |Link to Comment
  • Vivus Planning for Failure in Qnexa Birth Defect Study [View article]
    Thanks for this. ATL certainly brings up a valid counterpoint: If topiramate's birth defect mechanism is completely specific to epileptic women, Qnexa will likely have clean FORTRESS results in all relevant dosage levels along with a comfortable margin of safety. I just find this outcome very unlikely.

    However, don't confuse 'no proven link' with 'likely that no link will be proven'. No one has looked at pregnancies of non-epileptic women at 100mg/day dosage level (and at least 200 mg/day for margin of safety), so we don't know for sure either way. However, it is certainly unlikely that the trend for birth defects with topiramate is 100% epilepsy specific and that Vivus will be able to statistically rule out said birth defect risk. Adam Feuerstein said it right, "It sure does sound like Qnexa's resurrection depends on many uncertain or risky outcomes all turning positive".

    But indeed, please keep making valid counterpoints to allow investors to see both the bear and bull arguments.
    May 6, 2011. 02:29 PM | 3 Likes Like |Link to Comment
  • Vivus Planning for Failure in Qnexa Birth Defect Study [View article]
    Sorry doc. Studies have shown the greatest birth defect risk for topiramate is in the first trimester. The biggest potential risk, therefore, is for women who become pregnant unexpectedly while on Qnexa/topiramate. A category X designation won't solve this.

    I'm with you that the U.S. needs more options to treat obesity as the cost to our healthcare in terms of dollars and lives is astronomical. However, anyone who has followed the debate for any period of time will tell you the FDA has been extremely conservative with obesity drugs. I personally think Qnexa should be approved regardless of the birth defect issue (require two forms of birth control, or something similar), but I also think there's no way the FDA approves the broader indication given past experience without clean FORTRESS data (which, as I mentioned in the article, is very unlikely). That's just the way it is.

    Call me a child if you want, but someone who advertises themselves as a 'docweightloss' and stills misspells Qnexa is a bit more dangerous in my book.
    May 6, 2011. 01:58 PM | 4 Likes Like |Link to Comment
  • Historical Trial Data Bodes Well for Amarin [View article]
    One of the best articles I've ever seen on SA. Thanks for the DD Patrick!
    Apr 7, 2011. 07:35 PM | Likes Like |Link to Comment
  • Xenoport Expecting GERD Study Data [View article]
    I don't believe any company sits on significant data, good or bad, for any significant period of time. A leak is just too lucrative for everyone 'in the know' to avoid blabbing to someone.

    400+ patients is a lot of patients and there's a ton of data for each patient to go over. In my experience it takes about a month for double digit patient numbers and can take as long as 2-3 months for larger phase III. This falls somewhere in the middle. I would have expected data by now, but I don't believe this is beyond the realm of expectation.

    All in all, I wouldn't read too much into it. Though you may be right, crazier things have happened in biotechland.
    Mar 8, 2011. 07:50 PM | 1 Like Like |Link to Comment
  • Xenoport Expecting GERD Study Data [View article]
    Mar 6, 2011. 03:00 PM | Likes Like |Link to Comment
  • Xenoport Expecting GERD Study Data [View article]
    Someone pointed out that I had missed a 4-chloro substitution on the phenyl ring of the arbaclofen placarbil and subsequently the (R)-baclofen. As I'm unlikely to be able to get SA to change it very easily, please be advised of my mistake.

    The proper structure of baclofen, as I should have drawn it, can be seen here:

    The mistake has also been corrected at my own blog. You can see how the image should look here:


    Hat tip to the reader who pointed out the mistake.
    Mar 3, 2011. 08:54 AM | 1 Like Like |Link to Comment
  • MannKind Is Teetering on the Brink of Disaster [View article]
    I think we agree on all points.

    The title was the work of the SA editorial staff. Not the first time they've opted for a more sensational title. The original was "MannKind Conference Call Paints a Challenging Future for Afrezza".

    Thanks for the comment!
    Feb 15, 2011. 07:45 AM | 1 Like Like |Link to Comment
  • Why We're Initiating Coverage of Trius Therapeutics With an Outperform Rating [View article]
    I really like this write up, Jason.

    Two points:

    1 - I don't necessarily buy that the market will switch over to Torezolid from Zyvox as quickly as the switchover from Vanco to Zyvox. Torezolid and Zyvox are too similar and Zyvox has much stronger marketing support. Your sales estimates seem reasonable to me, though.

    2 - OPTR is a different case in my mind. I think of fidaxomicin in a position similar to Zyvox when it first hit the market. A new comer to the market that is clearly better than Vanco. Torezolid isn't competing with Vanco, but rather granddaddy Zyvox where it may have trouble differentiating itself.

    As usual, love the report. I found it to be very well reasoned. I definitely appreciate your professional approach.
    Jan 25, 2011. 03:21 PM | 1 Like Like |Link to Comment
  • Good News for Aastrom Bio: IMPACT-DCM Trials Show Proof-of-Concept [View article]
    I'm leaning positive in my general sentiment towards ASTM and I'm kind of perplexed as to why the market cap is so low. However, I'm a little cautious due to the fact that improvement in 6 min walking test did not improve over placebo as highly as NYHA class seemed to.

    As far as I know, NYHA class is almost completely based on tolerance to physical activity:

    What gives?
    Jan 21, 2011. 10:41 AM | 1 Like Like |Link to Comment
  • Biodel: Upside from Potential Linjeta Approval [View article]
    The FDA by no means ordered BIOD to continue testing. They did, however, say additional tests would be needed in order to approve Linjeta (whatever formulation they decide upon).

    The status of the drug is this: Linjeta in it's previous formulation is dead. It had tolerability issues that preclude it from ever being approved in an ITT statistical sense. However, Biodel is seeking new formulations that still utilize the EDTA/citric acid system that made the original Linjeta an especially rapid acting insulin. They basically must start from scratch, but since it's basically insulin, they don't have to do all the preclinical work that would be necessary of a novel drug. At the JPM healthcare conference, they stated they will likely not forgo Phase II testing in the new formulation. Upon successful completion of PII, they can go on to PIII. The old PIII trials, as far as getting the new formulation approved, might as well have never happened (and I the management would have preferred it didn't).

    So here's where BIOD stands: They need to decide on a formulation that has solid tolerability. They will probably perform PII trials, almost specifically to address the tolerability issue. They will need to perform a brand new PIII trial. They do not have enough money to perform all of that, and will therefore likely seek a partner or debtor - likely on particularly unattractive terms. Compare this against the potential market for the rapid-acting insulin therapy (which could be huge, or not). Whether or not that's a favorable trade-off is your decision.

    I'm guessing at the very least BIOD is two and a half years from market and likely longer.

    Thanks for the interest!
    Jan 17, 2011. 11:20 AM | Likes Like |Link to Comment
  • NDA Decision Delay May Be Good for MannKind, Not for Human Genome Sciences [View article]
    Thanks for that, Gekk, the map was very helpful.

    I do think the panels are important to eventual approval, but it seems that the panel variable is mostly independent of delay (of course, not always the case - some panel results cause delays) so I decided against including it here. Interesting that combining the delay and panel 'variables' give different results.
    Jan 14, 2011. 03:03 PM | Likes Like |Link to Comment
  • Tracking Short Positions of 3 Biotechs With PDUFA Dates in January [View article]
    Great data Sheff! Where'd you get the charts?

    Interesting that short interest has been shooting up on CLDA. It would that people are making big bets on rejection.

    The OREX chart appears to be driven by the FDA AdCom, rather than the PDUFA date. After the positive panel vote, the shorts covered - which makes sense. I'd like to see the next data point on that one. Whether short interest is rising again or dropping going into the OREX PDUFA would be telling.

    I have to say I would like to see these charts on an absolute, rather than relative scale. DEPO's short interest has been bouncing around in a rather narrow range (looks like noise to me), while OREX and CLDA have drastically changed and the absolutely scale would show this. Additionally, it would be nice to see an overlay of the three charts with '% of float short' on the y-axis. Might be very interesting. That would quite obviously show that DEPO is about a third the short interest as % of float than that of CLDA and OREX.

    Very good research, Sheff! I take this as positive news for DEPO and negative for OREX and CLDA - and I think that may be how January plays out PDUFA-wise. I really have not seen a solid bear argument on CLDA, yet, but first-pass through PDUFAs are notoriously rough.
    Jan 12, 2011. 07:39 AM | 1 Like Like |Link to Comment