"Ernie, I wouldn't mind hearing some of your bear cases for any tickers of note."
I apologize in advance for any toes I step on. Many of these have already had their melt down, but there are a few yet to come.
ONTY, GALE, SRPT, GALT, IMUC, DNDN, ARQL, CNDO, AGEN, CVM, CLDX (not a cancer vaccine fan), et al. A few of these have been delisted and are in the pink sheets. I don't want to get into specifics and I did not put any work into this list so I'm not really wanting to give more than the fact that I have a negative feeling for all the above. One of my basic rules about biotech and Yahoo mb's is that the more times you see a company touted off topic, the more likely it is to disappoint.
"The point is...this can be a very productive MB, and I often wonder if sometimes it catalyzes thought that leads to productive research..."
It does do that. For me, if I want to post, it makes me double check my facts and go back and reassess what's been said in the past. When I read your post this morning I went back and reread all the stuff on Zelboraf starting in Sep 2012. It's good to see how your ideas from the past stand up to the events as they occur. The one thing I was off on was expecting off-label use of the GSK combo. The NCCN deferred to FDA and is letting the regulatory process work. Every committee is different within NCCN. The NSCL guys let Cabo slip thru even though EXEL is going to run a pivotal phase 2. You and a few other guys bring up interesting stuff for me to look into so it is a productive enterprise. The one big caveat is that the majority of investment candidates mentioned off topic on this and other mb's has more losers than winners, so take what you read here with a serious grain of salt.
"If researchers want their work to resolve uncertainty and improve decision making in health care, they need to ensure that the outcomes they include are relevant to health service users (consumers) and other people making choices about health care."
I read the editorial and frankly these guys are #$%$ in the wind. Our system is based on a combination of public, nonprofit private and for-profit corporate research teams doing clinical trials and all have different motivations. Private sponsors want to do just enough to get their drug approved, not solve the ambiguities resulting from differing protocols. In a way, FDA sets some standards by defining the requisite endpoints for different indications, but expecting (for instance) Roche's and GSK's trials in their MEK/BRAF drugs in melanoma to produce results that yield side by side direct comparative stats on which to base treatment decisions is a bit unrealistic under current law. If all research were government funded, what they are proposing might be doable, but under the present system, more legislating and rulemaking will just slow the process even more and add more expense. Bringing an oncology drug to market already takes about 10 years and anywhere from $150 million to a Billion in costs. My opinion is that forcing a one size fits all list of requisite standardized endpoints and procedures on sponsors will only make it worse
"I can't envision why the FDA would not publicize such a designation."
That's the tip of the iceberg. With a few notable exceptions the vast majority of FDA interaction with a sponsor is privileged and not made public. The exceptions are ODAC meetings and formal letters of warning. Companies universally characterize their relationship with the FDA as "excellent" or "productive" even when such is not the case. They get away with it because they know FDA will not comment. Finding the FDA document on the approval of Cabo for MTC was a treasure trove of previously undisclosed information, including an unscheduled OS analysis. If Cabo has not been approved, none of that information would have been revealed and that is typical in this industry. I've said it before and it bares repeating, what you don't know is more important than what you do know.
As an aside, but related thought. It is very possible that the EMA asked EXEL for another administrative look at the EXAM OS data as they consider the Cometriq application for MTC.
"Being granted breakthrough designation would certainly seem to be a material event. Can a publicly traded company withhold such info w/o being in violation?"
What is and is not "material" information is a big fat gray area for biotech. In addition to the ambiguity of what defines "material," if the information is not selectively released and those in possession of the information do not trade based on that knowledge, then there is no violation. Companies can sit on material information for long periods if they meet these criteria.
Imclone is the only example I can recall of a company that ran afoul of the SEC in this regard. The relevant SEC document is REG FD (FD for "fair disclosure"). I think where the generally recognized line falls for biotech is that phase 3 results are material and most other things are not. MMM did elaborate and say that EXEL considers the upcoming Comet 1 interim analysis to be a "material event" and will disclose. But again, I will point out that as long as they do not violated FD, they can delay that disclosure for a long period.
"Genentech/Roche initiated a trial of their combination against Zelboraf (NCT01689519) six months later, in January 2013, putting it two or more years behind GSK. Will the first-to-market advantage favor the GSK combination?"
We had this discussion on this board about a year ago. With the caveats that I'm working off memory and things may have changed, my recollection is that Roche somewhat closed the gap by using a PFS endpoint in their phase 3 trial whereas GSK was using OS. Regardless, GSK upped the ante by filing on phase 2 data and it will be interesting to see if Roche responds in kind or as is more likely, waits for the phase 3 results which should be out shortly.
Roche, by virtue of being first with Zelboraf, still holds the high ground, but GSK has an advantage in that both its drugs are already approved as monotherapy. My recollection of NCCN guidelines is that they made mention of the BRAF/MEK combination but stopped short of a recommendation that would have opened a pathway to reimbursement for GSK for the combination. The assumption is that the GSK combination will get accelerated approval soon and then the advantage shifts to GSK with Roche trying to play catch-up. My guess is that GSK will get nearly a full year as the exclusive provider of a BRAF/MEK combo.
Usually FDA only gives a single accelerated approval within a class of drugs for the same indication except in this case, Roche can correctly point out that the development programs were simultaneous and its drug combination should get the same regulatory considerations as those given GSK, we will see soon how this all works out.
"Even a stupid person like me (high school dropout) can figure out that CEO MMM will not convert the EXEL shares to Deerfield if PPS keep moving up in 2019."
You need to do some homework and first learn how convertibles work in general and then look up the specifics of the EXEL deal. Start with Wikipedia or Investopedia and then the SEC filing or EXEL 2012 annual report.
Also, you keep talking about Deerfield as if they are the sole holder of the original convertible offering. Deerfield is the provider of a separate credit facility from the convertible to the tune of $124 million, they may or may not have also participated in the convertible.
"The short hedge on the $250,000,000 at $5.31 convertible is 47 million shares, so the SI is pretty much exactly where it should be with the stock above $5.31."
The short interest going into the convertible offering was 27 million shares and after the convert/simultaneous secondary (Aug 2012) it popped up to around 40 million. As the stock price rises above $5.31 there is certainly an incentive for holders of unhedged converts to continue selling short into the rally. Your post seems to indicate that you think all of the short shares outstanding (47m) are in position as a convert hedge, is that really your opinion?
Yes, I'm tempted to say you've grasped the current immunotherapy landscape, but more accurately you have recapitulated my version of it. Perhaps I've oversimplified, but so far my version seems to be holding up.
I did some more reading and the reason for the severe IMUC meltdown is more clear and it does have to do with unreasonably high expectations stemming from phase 1 results touting a 20 month improvement in OS vs a historic control. The observed phase 2 result is a .87 survival HR in the ITT population. Frontline GBM will require an OS endpoint and if that .87 HR is the best they can do, it would require a very large sample size to achieve a statsig result. I've long suspected that Dendreon got a little lucky getting a statsig result with a smallish phase 3 trial. They could have made a go of it with Provenge, but they needed to move into an adjuvant indication several years ago and I think that ship has since sailed.
"BTW, would you say that IMUC is another entrant in the class of un-specialized cancer vaccines?"
I don't follow them that closely and I'm not sure what you mean by "un-specialized." I believe their product is similar to Provenge, an autologous blood treatment as opposed to an off the shelf treatment.
"For every 2 spectacular biotech successes there are at lest 3 meltdowns. If I were putting together a portfolio of promising short positions it would include a half dozen companies whose names are frequently batted around on this mb."
When I posted the above I had not even noticed what happened at IMUC, it is certainly one of the names I had in mind. The interesting thing is that their ph 2 data was actually pretty good. Expectations must have been very high.
"Just wondering you like SRPT, Bought a little at bottom."
In the short term I think the FDA will hold to their position that they will not approve the DMD drug on the basis of a 10 patient data set. That said, once that policy decision is reiterated, the market would again be disappointed. Longer term, I'm not sure what will happen. Just my opinion and I do not have any special insight or facts not available to everyone else.
"AVEO Pharmaceuticals, Inc. : AVEO Provides Update on Interim Analysis from Tivozanib Trial in Colorectal Cancer:"
Related story: "Your Vote Counts: Who Is the Worst Biotech CEO of 2013?" Aveo's CEO Ngoc is on the list. His screw up was being overly concerned about providing for the wellbeing of the control arm in his RCC study to the point that it masked the benefit provided to the treatment arm of his pivotal study.
Being a successful CEO in this business requires a certain detachment that is needed to make difficult decisions. Cases in point: EXEL has not included any crossover provisions in any of its pivotal trials and once the decision was made to focus on Cabo, EXEL let go of a great many very deserving employees. Both of those decisions had to be difficult, but both positioned EXEL for future success. Early in his tenure, MMM tended to overpromise (Comet 2 SPA fiasco) and has now become more circumspect in his release of information, refusing to speculate or even commit to anything other than vague timelines. Comet 1 full enrolment was a real surprise and nothing was ever said about the FAA mandated look at the EXAM survival numbers done in June 2012, despite there being some good news there.
We are on the beginning edge of a significant news cycle and it will be interesting to see how the company characterizes the various news events as they transpire.
"An assumption could be made that the short thesis in biotechs is the odds favor bad things happening more often than good."
Bingo! For every 2 spectacular biotech successes there are at lest 3 meltdowns. The big players on the short side hold a full portfolio of positions and shorting is only one tool within a strategy that includes options, convertibles, and offsetting long positions in other companies. If I were putting together a portfolio of promising short positions it would include a half dozen companies whose names are frequently batted around on this mb. Picking winners in biotech is difficult and requires a great deal of research, patience and tolerance for market moves at odds with the original investment thesis. EXEL may well be the last developmental biotech I will gamble on in a big way. Frankly, I see Genentech (Roche), Bristol (courtesy of MEDX), and Amgen (largely thanks to Abgenix et al) having reenergized their drug development programs at the expense of the upstarts.
"If PD1's work does that make Cabo a drug with no future?"
The PD1's do work but there isn't much overlap with Cabo's potential commercial market, so not to worry. At least initially the market EXEL is targeting is at the refractory end, very sick patients who are pretty much running out of viable alternative treatments. The PD1's will be upstream, in frontline and eventually adjuvant settings.
"I can't name a single vaccine based therapy that's worked..."
In fact, if you want to take a broader look at cancer immunotherapy, there are a handful of approved products. BCG, IL2, Interferon, Provenge and Ipilimumab all are approved immune products for various cancers. The PD1 products will be the most effective and will be monster revenue generators.
The vaccines have been developed based on the premise that tumors escaped immune recognition. The more accurate description is that tumors actively suppress immune response. That is the paradigm being addressed by the checkpoint inhibitors and it is a branch of the science still in the early stages with many exciting discoveries yet to come.
"I can't name a single vaccine based therapy that's worked..."
Provenge is often thought of as a form of vaccine. It is definitely an immune therapy product, but doesn't quite fit the traditional antigen/adjuvant product we identify as a vaccine.
"....look for the right check points when it comes to the immune related strategies."
The checkpoint inhibitors are a different class of drug than the kinase inhibitors like Cabo and Ponatinib. The checkpoint inhibitors work by acting on the pathways by which tumors induce immune anergy. The first (and only) approved checkpoint inhibitor is Ipilimumab, which acts on the CTLA4 receptor. The PD1 and PDL1 inhibitors are working their way through phase 3 trials now. These drugs are immune therapy and they do result in significant tumor shrinkage. That was the point I was making. Immune therapy should not be thought of as limited to a role of tumor stabilization. That is the story being sold by the vaccine companies.
"immunotherapy has a different mode of action. it almost never shrinks tumors, it slows growth. So no effect on PFS, but a good effect on OS."
Let's talk about this a bit. The "slows growth and thereby increases survival without shrinking tumors" is the paradigm that the cancer vaccine companies have been pushing for years. I have a few issues with this entire notion. First, we now know from the example of the checkpoint inhibitors and previously from interferon and interleukin-2 that immune therapy can and does shrink tumors. The vaccine companies would like you to believe that vaccines do not shrink tumors because they are somehow "different." My premise is that they don't shrink tumors because they just are not very effective.
Tumor shrinkage is a measure of activity. Research compounds can be screened for activity and then are tested further to see if this activity results in a benefit to the patient in terms of increased survival. With the vaccines our hints of activity are immune response that is ASSUMED or PRESUMED to have benefit and the occasional anecdotal patient that appears to benefit from vaccine therapy. So the vaccine companies have less cause/effect data and have to rely more on a statistical argument for the investment thesis. Here's my issue with this. Statistically test 50 different placebo vaccines and a handful of them will have what appears to be compelling survival or PFS data. Look hard enough at any body of data and natural variance will give a good statistician plenty of fodder to make a claim of efficacy. Add to this the selectively opaque one way viewing of data that is de rigueur for developmental biotech and it is easy to see why a heck of a lot more money has been made betting on the short side of cancer immunotherapy than has been made on the long side.
I can only see the abstracts. Kurzrock was lead author for the phase 1 study of Cabo that had the MTC cohort that led to the phase 3. This was back when they were using very high dose Cabo. I wonder if the calcitonin spikes correlated to drug treatment holidays or dose reductions? NCCN is doing an MTC webinar later this morning you might be interested in.
Not sure, but I'm guessing the takeaway message is for oncologists to find a dose level that their patients can maintain without interruption.