The overall goal for VBLOC therapy is weight loss. Is VBLOC effective in helping obese folks lose weight? Yes. The co-primary goal for VBLOC therapy is safety. Is VBLOC safe when helping folks lose weight? Yes.
Now, place yourselves in the shoes of the analysts at the FDA. They aren't like us investors, who only look at the end results of a trial. They are scientific geeks who drool over data, probability, and statistics. Let's take a portion from the press release and analyze it for ourselves:
"In total, 52.5% of treatment patients had 20% or more EWL compared to 32.5% in the control group (p=0.004), and 38.3% of treatment patients had 25% or more EWL compared to 23.4% in the sham control group (p=0.02). While the respective co-primary endpoint targets of 55% and 45% were not met, the endpoint targets were within the 95% confidence intervals for the observed rates and therefore the observed rates were not significantly lower than these pre-specified rates. These efficacy data demonstrate VBLOC Therapy's positive effect on weight loss."
The probability that 52.5% of VBLOC patients will achieve = 20% EWL is 99.6%. The endpoint was 55%. So VBLOC missed the endpoint by 2.5%. Had VBLOC hit the endpoint, but the probability of hitting that endpoint was 0.05), the confidence for VBLOC therapy being effective would be less than what the trial produced. In summary, over 50% of patients will achieve = 20% EWL while undergoing a very safe weight-loss therapy. I don't think the FDA will completely ignore or dismiss this fact. Will the FDA consider the 2.5% margin for this endpoint a deal-breaker?
Here's where confidence intervals really come into play. We as investors are not privy to the complete set of data that will be submitted to the FDA, but we are given a glimpse through the p-values how that data might look on a chart. With high p-values, you can imagine data being scattered all over the place, which means you would put very little confidence in the data--it would be too random. With low p-values, you can imagine data being bunched up really nice with very little outliers. Here's what I'm trying to get at:
"The trial demonstrated a clinically meaningful and statistically significant excess weight loss (EWL) of 24.4% for VBLOC Therapy-treated patients...." That means of the 52.5%, the average patient achieved 24.4% EWL, which is very close to the 25% range threshold.
I can hear you screaming, "But the endpoints were agreed upon in the Special Protocol Assessment, and they didn't meet the endpoints!" Yes, endpoints are important, but the data is even more important. Otherwise, the FDA could just read the press release and say, "Well, the endpoints weren't achieved. Don't waste your time applying. Denied!" Instead, the FDA will look over the data and determine if the results were reasonable with respect to the endpoints. Some drugs did reach predetermined endpoints but were denied, because the data didn't convince the FDA. Some drugs did not reach predetermined endpoints but were approved, because the data did convince the FDA.
Given this novel approach to weight loss, the very unique manner in which the trial was conducted, and the excellent patient participation rate (93%), will the FDA be pleased with the data and convinced that VBLOC therapy works? Or will the 1.5% margin (8.5% vs 10% more effective than sham device) convince them that it doesn't' work? I think they'll conclude that the therapy works, based on the confidence intervals. But will it work good enough for market approval? I think that's where benefit/risk will come into play. The therapy was proven to be safe by a wide margin. Since the risk is practically zero, the benefit doesn't have to be extremely high to achieve a high benefit/risk ratio. The very excellent data shows that there is a significant benefit from using the device.
Here's something interesting to note about one of the drugs:
"Vivus, Inc. announced that the U.S. Food and Drug Administration Endocrinologic and Metabolic Drugs Advisory Committee recommended Qnexa be granted marketing approval by the FDA for the treatment of obesity in adults. The Committee voted 20 to 2, on the recommendation for an approval based on a favorable benefit-risk profile."
Key phrase: favorable benefit-risk profile. I think VBLOC therapy fits nicely in the "favorable benefit-risk profile" category.
Another interesting note about the other drug:
"Three double-blind, randomized, placebo-controlled trials demonstrated that BELVIQ along with diet and exercise was more effective than diet and exercise alone at helping patients lose 5% or more of their body weight after one year and managing the weight loss for up to two years."
Key phrase: along with diet and exercise. If patients taking BELVIQ don't adhere to healthy diets and exercise, the drug becomes ineffective.
VBLOC therapy is effective in that it helps obese patients overcome the issue they struggle most with: self-control. And there are no negative side-effects.
If you think the VBLOC story is over, as the market currently reflects, you may want to reconsider.
I agree with your basic conclusion that VBLOC therapy is statistically better than sham - and that may be enough for the FDA. But you need to take a course on biostatistics. For example, you state:
"The probability that 52.5% of VBLOC patients will achieve = 20% EWL is 99.6%."
Actually the p value indicates that there is a 99.6% probabilty that more patients on VBLOC achieved 20% EWL than on sham - that is all. The relevant statistic to address the expected number of patietns that acieve 20% EWL is a confidence interval which I did not find for that outcome measure.
Hello Crew, I got scared out on Friday ... lost $2000 which I can hardly afford to do. I wish I could have enough faith to buy back in ... but I have 2 questions for you and any other informed poster here: 1) why can't we get an apples/apples comparison here of pounds lost instead of EWL and 2) what can they base a positive earning report on if they are not selling product in GCC or Australia ?
I'd love this option to be a viable one but I'm leery of hype now. Thoughts appreciated. Thanks.
They could divulge all of the trial data if they wanted, but that would be best published in a scientific journal. (I'm guessing that will eventually happen.) They provided investors with material information that essentially summed up the trial. Providing too much information too soon could make them vulnerable in the market place (with competitors, investors, etc.) However, it will behoove the company to provide an apples/apples comparison if they are allowed to market their product. And this is why:
With respect to BMI, morbid obesity sits above a 40. Overweight is 25-30, Moderate obesity is 30-35, and severe obesity is 35-40. Let's walk through an example to see how EWL factors into shaving off actual pounds.
A 5'5" tall person with a BMI of 40 (morbidly obese) weighs about 240 lbs. If this person undergoes VBLOC therapy, there's a high probability that he will lose 25% of his excess weight. Excess weight is basically a BMI of 25 and above. With a BMI of 25, the same person would weigh around 150 pounds. Hence, the morbidly obese man would have 90 pounds of excess weight; in other words, if he shed 90 pounds, he would be at normal weight. If he lost 25% of those 90 pounds, he would be down to 217 pounds from 240 pounds, or 23 pounds lighter.
Analysts and bloggers are already coming out, speculating that it's still possible for the Maestro System to be approved. But now they're shifting their focus to Maestro's marketability. Will insurance companies pay for the treatment? Will patients pay for the treatment? Why would patients pay for VBLOC therapy when they could just pop a pill in their mouths? Well, consider this:
BELVIQ (one of the weight loss drugs that was approved last year) helps patients lose 5% of their body weight (talking pounds here) WITH exercise and diet. If our same 5'5" person example submitted to BELVIQ for his treatment plan, he would essentially lose 12 pounds, bringing him down to 228 pounds from 240. In comparison, the VBLOC patient would lose 11 more pounds without having to worry about side effects! Plus, it will be difficult to get a 5'5" person who weighs 240 pounds to diet and exercise in a manner that will make BELVIQ effective.
Commercially, I think VBLOC is an excellent option for the morbidly obese, because suffering from complications that come with surgeries and drug side effects, when you're that obese, is harmful both short and long term.
In regards to their upcoming 10-K. remember, they sold devices in both the first and second quarters of last year in Australia. No new sales were reported for the 3rd quarter. But that may not be a reflection on demand. It may be a health care coverage issue. The company is actively working toward obtaining full Australian reimbursement approval for both surgeon's fees and hospital fees for VBLOC and the Maestro System from the Australian Medical Services Advisory Committee; as well as, obtaining device listing for the Maestro System on the Australian Prostheses List. As you may know, Australia has universal health care.
IF an 8-K comes out this year that states the company received Australian reimbursement approval, you can expect the market to react favorably.
The upcoming 10-K may be juiced-up with lots of tasty information.
Great points. I'll be looking at insiders for a clue - esp Knudsen and Lea (who have both been inactive) and Douglas (who is unafraid to invest). Imo dead money for a while, possible runup to FDA vote - then either a dime or $3 depending on FDA vote. Even if FDA approves, the company still has to raise funds and to show that it knows how to market. They have sold close to nothing in Australia and Europe despite approval, claiming that any negative events would jeopardize FDA approval.
Granted it is probably better than anything out there at the moment. Yet, as a blockbuster, well it fell short. If there was nothing left the stock would be at 10 cents now. The market probably acted about right knocking the stock down over half. Going forward is what matters now. Managed right there is money to made from the current stock price.