Top 5 Biotech Tweets of the Week

Another week has passed with Tweeters giving their thoughts on individual stocks and the industry as a whole. Here are my top five for this week.

The prostate cancer market is about to get very interesting. Medivation (NASDAQ: MDVN  ) and Astellas expect interim data by the end of the year from their Prevail trial testing Xtandi in patients who haven't been given chemotherapy. Xtandi is currently only approved for use after chemotherapy, leaving Johnson & Johnson's (NYSE: JNJ  ) Zytiga the pre-chemo market essentially all to itself.

David predicts Xtandi can take half of the market in less than a year, which sounds a little ambitious. But as he points out, it depends on the data, which we haven't seen yet. Also, it's easier to penetrate an oncology market with an established player than one for a chronic condition because capturing newly diagnosed patients is key. It's unlikely you'll see a mass switch from patients currently taking Johnson & Johnson's Zytiga no matter how good the data are, but the important thing to watch is how well Medivation and Astellas are able to convince doctors to prescribe the drug to their new patients.

Agree completely. The good news is you only have to worry about it in the short term. Valuations will reset. Eventually.

The graph speaks for itself and shows just how hard it is to launch a drug. Sure, there are some drugs in the under-$20-million category that are launching into small markets and will never be blockbusters, but there are also plenty of challenges that drugmakers face -- including stiff competition, doctors' reluctance to prescribe new therapies, and getting coverage from payers -- even when they're launching into multibillion-dollar markets.

Investors need to keep that in mind when valuing biotechs on the verge of launching drugs.

Keeping in mind Zach's comment about critical thinking, of course.

Sorry, Matthew, but I have to respectfully disagree.

As a scientist, I understand the argument. I'd like to know if Amarin's (NASDAQ: AMRN  ) Vascepa not only improves triglyceride levels but also improves cardiovascular outcomes -- the purpose of the Reduce-It trial.

But Amarin's management is beholden to its shareholders, not to scientific curiosity. If the biotech decides the cost of continuing the trial -- including the cost of raising additional capital, which could be expensive -- doesn't justify the risk-adjusted expected value from a positive clinical trial, it's not in shareholders' best interests to continue the trial.

There are certain ethical issues with stopping the trial, but if the FDA is arguing that results from other trials testing triglyceride-lowering drugs make it unlikely that Reduce-It will succeed, it seems reasonable to end the trial. Patients can still get the drug off label if they believe it's helping them.

Sarepta Therapeutics (NASDAQ: SRPT  ) is in a bit of a tight spot designing the phase 3 trial for its Duchenne muscular dystrophy drug eteplirsen. It's hard to argue from the phase 2 data that eteplirsen doesn't work -- it might even get approved using that data alone -- so running a trial with a placebo control could be considered unethical if you assume the drug works. It might even be impossible to run that kind of study if eteplirsen is approved while the phase 3 trial is still running because many patients in the trial will dropout and take the approved product rather than risk being in the placebo group.

Sarepta Therapeutics is getting around the issue by having a matched control group of patients with Duchenne muscular dystrophy who have mutations that eteplirsen wouldn't be expected to help. While it's a reasonable control group, the trial is open label -- that is, everyone knows who's getting the drug and who isn't. The trial will assess how far the patients can walk in six minutes, which measures not only how well the drug is working, but, to some extent, how much effort the patient wants to put into the test. It's reasonable to assume that patients getting a drug that they believe will help them are likely to work much harder during the six-minute walk test than those who know they're in the control group.

That's going to skew the results in eteplirsen's favor, but I think Sarepta is doing it because of the ethical and practicality issues, not because management has little confidence in the drug. Fortunately, Sarepta seems to have a good relationship with the FDA, so I'm sure whatever trial design the company settles on will be signed off by the agency.

Finally, here's a bonus sixth tweet from me:

#Ivebeenconvincedforawhile

As a reminder, tweet me at @BiologyFool if you see an educational or entertaining tweet that you think should be included in next week's roundup. Admittedly, I can't see every interesting tweet out there.

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  • Report this Comment On October 20, 2013, at 5:56 AM, EllenBrandtPhD wrote:

    Brian,

    Re SRPT: Talk about a "high-quality problem!"

    The advocacy-parent organizations have shifted Sentiment so extraordinarily fast away from RNA and towards SRPT, they are clamoring that there be NO Placebo groups in future trials.

    This is out-of-your-mind Bullish and Night Versus Day from the advocacy groups' previous stances just a few months ago.

    Also clear from the presentationThursday is that SRPT will allow previous Placebo group refugees from RNA's trials to apply to be non-Placebo subjects in future SRPT tests. That RNA has apparently "released" them to do so is another Big Hint, which some analysts will interpret this way reading between the lines:

    Might GSK - working fast before other bidders can get on the ball - choose to make a takeout bid for all of SRPT now, at the same time purchasing all of RNA at its current low, low, lowball valuation, and fold the two into a new division headed by Chris Garabedian?

    Yes, SRPT has said repeatedly it doesn't want it.

    But at the right price and incentives for management and researchers, you can make anything happen.

    Ninny Baby Shorts aside, the research article that came out Tuesday - and was immediately glommed onto by the general science press around the world - makes SRPT appear maybe twice as valuable - if not more - than some believed it was before the article came out.

    That's because everyone not entirely brain dead now understands that the "two additional products" Chris Garabedian talked about at Morgan Stanley and Baird will almost certainly be a Tuberculosis-related product and a Horror Virus product aimed at Marburg-Ebola-Etc.

    Meanwhile, very quietly and without fanfare, Sarepta began adding in the word "Becker's" to the Duchenne blurb in its press releases. Clearly, this one is a hint that a second MD genotype protocol is in the works, and perhaps, sooner than some expect, SRPT will introduce protocols for treating many more - maybe all - MD genotypes.

    The "problem" with Sarpeta as a STOCK is that there is literally TOO MUCH good news crowding in very rapidly now.

    Within weeks, it should be an almost entirely "Institutional" stock, if it is not already.

    Shorts were reduced by a whopping 16 percent in the last reported period - and one suspects they will now be down another 10 percent-plus in the current reporting period.

    Big - i.e. Professional - Short positions are coming out very fast now, leaving the remaining Shorts in the hands of "Babies" - the "Dumb Money."

    Meanwhile, watch for the next spate of SEC filings to show a very nice bump up in Institutional holdings - the "Smart Money" - with some high-profile funds having increased Long positions considerably.

    Could any of these surmises be incorrect. At this point, I honestly don't think so!

    Fools on the Short side need to cover and switch direction as fast as their little mouse clicks can accomplish it.

  • Report this Comment On October 25, 2013, at 6:48 PM, EllenBrandtPhD wrote:

    Posted Friday:

    First two fund filings are in for SRPT, and they are Doozies!

    Oxford almost doubled its stake, and Kornitzer quintupled its stake.

    As I said above, I think the new filings may be spectacular over the next three weeks. And since even the brightest funds tend to exhibit lemming-like behavior, more will clamor to get in on the action if all goes well. The float is miniscule compared to most others.

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