Vical: Debunking The Factless Self-Serving Articles From Adam Feuerstein

Aug. 05, 2013 6:07 AM ETBBI3 Comments
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Value, Special Situations, Growth

Contributor Since 2013

An independent/contrarian mindset, combined with patience, produces the rewards of private capital investing, while still maintaining liquidity for easy exits.


The Feuerstein-Ratain Rule rule is self serving quackery.

The F-R Rule states companies with market caps in the $300 million to $1 billion range had a 17% success rate with phase III cancer drug trials. Just because a stock is under the radar screen of Wall street, has no bearing upon the fundamentals. In fact, a low market cap can become self-reinforcing for most decent sized Wall street participants. . A distorted prediction or statement about about an investment which forms a substrate that ultimately leads the person to behave in the predicted manner.

Most Wall st managers shy away from micro-cap stocks. Many of them have well defined rules that limit their ability to buy stocks with lower market caps and low share prices. In reality, for real investors, it is the actual fundamentals of the company, that drives the market cap. For this reason, biotech stocks have a habit of gapping up in market cap, immediately after releasing unexpectedly positive clinical trial results.

What is most important in biotech investing is a strong understanding of the science underlying the therapy in question.

There is no doubt in my mind that Adam Feurstein has little to no understanding of the science underlying Allovectin-7's efficacy.

Vical did not enroll the "healthiest Melanoma patients ever"

The healthiest metastatic Melanoma patients in a pivotal study were enrolled in the GENTA study.

>>>"AGENDA was a randomized, double-blind, placebo-controlled trial of dacarbazine administered with or without Genasense(R) in patients who had not previously received chemotherapy. As defined in a prior randomized trial, AGENDA employed a biomarker to define patients who might maximally benefit from such treatment.

In the trial, median survival was 13.5 months in the Genasense group(R) and 13.1 months in the chemotherapy-only group (P=0.73)

The study is designed to confirm certain safety and efficacy results from an antecedent randomized trial of Genasense combined with dacarbazine (DTIC) in patients who have not previously received chemotherapy (GM301). AGENDA employs a biomarker to define those patients who derived maximum clinical benefit during the preceding study. These patients are characterized by low-normal levels of LDH (lactate dehydrogenase), a tumor-derived enzyme that is readily detected in blood."<<<

About LDH (lactate dehydrogenase)

Eur J Cancer. 2009 Jul;45(10):1807-14. doi: 10.1016/j.ejca.2009.04.016. Epub 2009 May 4.

>>>"In Study GM301 (N=760) and Study 18951 (N=325), LDH was within the upper range of normal for a large number of patients. This was not exhibited in the general population, suggesting such values may be elevated rather than normal in melanoma. A highly ordered and monotonic relationship was apparent between LDH and survival: survival worsened as LDH became more elevated, even when LDH remained within normal range. LDH and tumour size were poorly correlated; elevated LDH was not associated with any one disease site. LDH was highly predictive of oblimersen effect.


In designing studies, LDH should be considered, regardless of tumour size or disease site."<<<

There is loads of powerful evidence from clinical studies that ties LDH levels to survival.

GENTA enrolled only low normal only LDH patients, while Vical used only normal LDH patients, and no low LDH patients at all.

THEREFORE, the patients in the GENTA Melanoma study were healthier than are the patients in the Allovectin-7 phase 3 study.

Since the control arm of the GENTA study lived 13 months, there is no reason to believe that the Allovectin-7 control arm should live longer than 13 months.

It is possible that control arm could live 15 months, but that is only if all of the US patients were able to get into a Yervoy compassionate use program.

There was no compassionate use program for Zelboraf, which was not FDA approved until late 2011. Zelboraf only increased survival by a few months, because Melanoma mutates quickly, and the remaining tumor cells are no longer effected.

Potential Yervoy effect upon the phase 3 Allovectin-7 study control arm.

63 % of the Allovectin-7 phase 3 were in stage 4 by enrollment. By the time those stage 4 patients progressed in their disease, they had very little time left to apply for the Yervoy compassionate use program.

More importantly, up until early 2011, the Yervoy compassionate use program was only available in the US. There were only about 40% of the Allovectin-7 study patients enrolled in the United States.

Yervoy was approved in the United States in March 2011, and in Europe in September of 2011.

For theoretical purposes only to generate the best possible potential survival for the control arm, let us assume that everyone in the Unites States control group was able to access Yervoy, even though that is more than double the best case scenario.

Because Yervoy was NOT approved until March 2011, and the last US patient was enrolled in Feb. 2010, which is 13 months later. The median patient was enrolled in April 2009, which is 23 months before Yerovy was approved. Since the assumed median overall survival is 12 months, based upon the 78 patient cohort in the phase 2 that only received a few shots of Allovectin-7, most of the control would have been dead by the time Yervoy was FDA approved. Yervoy was not approved in the Europe until late 2011. Therefore, if there was any significant usage of Yervoy, it was from the Compassionate use programs, which were only in the US until close to approval in the US, and only in Italy.

In the second Yervoy study that combined it with chemo, the median survival advantage was only 22.2% over chemo.

Chemo damages the immune system, and that is why the survival advantage dropped, even though the dosage was increased from the FDA approved dosage of 3mg/kg to 10mg/kg.

Because the expected median overall survival is 12 months, let's use a 25% increase to account for the potential use of Yervoy by all the United States patients in the control arm.

12 months X 1.25= 15 months for the US control arm patients.

But, the non United States control arm would still be expected to live for only 12 months. Even if the number of United States patients is 50% of the study size, instead of the Vical's best publicly disclosed estimate of 40%, the entire control arm mOS goes up to 13.5 months.

There is some evidence that stage 3 Yervoy patients lived twice as long... OK... then let us do that calculation. 37% of the phase 3 is stage 3. To be generous let us estimate that half are in the United States = 19%

Now let us assume that everyone of them got Yervoy, and their median overall survival is boosted by 100%.

19 %= 24 months, 21%= 15 months 60%= 12 months TOTAL= 14.91 months median overall survival

Therefore, If everyone in the United States control arm got into a Yervoy compassionate use program, the total control arm survival would be 14.91 months.

Since the target of deaths was reached at 50 months for the median enrolled patient, in a study that was randomized 2 to 1, the conclusion is beyond doubt.

The super long duration of the phase 3 study means the Allovectin-7 arm lived about 40 months in median, even if the control arm lives 14.91 months

As I presented in my previous Seeking Alpha analysis, my 40 month estimation for the Allovectin-7 arm was conservatively based upon 14.9% of the control arm being alive at 50 months. 14.9% being alive at 50 months is strongly correlated with a 15 month mOS.

So, even if the control arm lives 15 months, the super long duration of the Allovectin-7 phase 3, can only mean one thing... That the A-7 arm is living much longer. A 15 month mOS for control arm= 40 months for the Allovectin-7 arm.

Silence and Disinterest

Going into the 2013 meeting of the American Society of Clinical Oncologists, very few people in the Melanoma community knew much about Allovectin-7, with the exception of those who are directly involved in the phase 3, and a few very patient investors.

Just because most people do not understand or know something even exists, does not mean that thing will not be extremely significant in the near future.

99% of the people on Wall street were oblivious to the fact that way too many semi worthless Liar Loans, had been ground into CDO (Collateralized Debt Obligations) sausages, that were fraudulently rated AAA. These toxic sausage CDOs became responsible for almost tipping the entire world into another Great Depression.

Does that mean this huge problem did not exist? Does that mean the problem was not incredibly significant, and would have huge effects upon the world. Practically all of Wall street knew that anyone who could fog a mirror could get a residential real estate loan with next to no money down. Yet only a very small group of people bothered to connect to dots.

Bottom line: Adam Feuerstein presented zero actual analysis

The analysis I presented is rigorous, with hard facts, and actual numbers, that proves my conclusions.

All Adam Feuerstein presented was a poll of his hedge fund friends, and other assorted flunkies that follow his factless tweets.

I could poll my clients, and report that 100% think Allovectin-7 will be one of the most used cancer drugs over the next 5 years. But, that is not a persuasive argument for investing.

All that counts are the facts! I have presented the hard facts, while Mr. Feuerstein has presented next to nothing.

Disclosure: I am long VICL. 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.

Recommended For You

Comments (3)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.