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re: Oncology Biomarker Qualification Initiative (OBQI)
I think this is an incredibly important initiative. If biotech companies expect to continue to receive the big dollars for their drugs, they will have to be able to prove they are working as expected almost immediately after they are dosed. Waiting for the disease to progress simply won't cut it.
OBQI will also move the focus in cancer treatment to early detection. This will drive a dramatic shift in the kinds of drugs under development, placing a premium on drugs with very low side effects on an absolute basis (i.e. as in not just low compared to chemotherapy).
"Therapeutic index" will be among the most important two words in oncology next decade.
re: TELK
No. I get so many questions on it though I usually attend their sessions whenever I have a chance.
re: Repatriated earnings
The point of focusing on repatriated earnings is the restrictd use for those earnings. Pfizer, for example, has $38B in cash in its cash hoard whose use is restricted by a written agreement with the IRS. They have already said it will be used to acquire companies/products, among other things on their list. The other top seven pharma repatriators have largely said the same thing for the $110B they are collectively bringing back.
While it does not create additional cash (it's already on the balance sheet regardless of where it happens to be deposited), it does represent money that comes with a 30% lower cost of use because of the tax break. 30% lower cost of use means you have more room in your ROI calculatiosn for earlier stage deals (can take a higher risk discount than "normal") and/or pay higher than you normally would.
Of course if I would have read a little further before I wrote this I would have known Dew addressed this in two sentences :)
re: TELK
They were hammered on this in the breakout at JPM in January. They won't come out and say exactly how they've done it, but it is clearly:
(1) They will hold the data themselves until they have all three
(2) They have instructed the CRO to not do the analyses until all three triggers are hit.
The first is flat out wrong. The second is questionable and very problematic from a statistical standpoint unless their SAP with the FDA says something like "open the database when at least XXX patients" have had the event. Most SAP's I've read specify a specific number. (Others here can chime in if the SAPs they've done/read are different from my experience.)
PLEASE, PLEASE, PLEASE take what happened to CTIC investors as a caution against believing "longer is better." Even CTI management was saying that on conference calls and the only prospective statistically significant positive conclusion you can gain from those trials is you should go to Russia to be treated if you have lung cancer.
re: This is Form-13G season…
NASDAQ.com has a neat little utility that does that for you. I find it fascinating and useful as the data can change daily because of funds crossing and recrossing % ownership thresholds. you can go into one fund and see all adds, holds, and sells. Nice tool we use all the time.
Pfizer
I agree. Blah, blah, blah... Let's get on to what biotech products you'll be buying with all that cash!
Pfizer presentation
Anyone else a little surprised to hear how forcefully they are planning to push Celebrex?
Always keep news of your gains quieter than news of your losses lest the market minx hear you and decide to do something about it :)
re: MATK provides Reg FD update
Assuming that was not just a repeat of a press release, an 8-K formatted in this way probably means the company (a) believes this is material information; and (b) selectively disclosed it to someone in the last 24 hours.
Your Dad and your family are on our prayers...
re: Ex-FDA head Lester Crawford joins lobbying group
"Crawford is barred from lobbying former colleagues at the FDA for a year, but he can give clients strategic advice about food and drug issues and can lobby members of Congress."
That presumes the veternarian actually knows something about food and drug issues. He didn't demonstrate that while he had the job, so I'm not certain why anyone would pay him now that he gave it up...
re: ASCO
Placeholder abstracts do play a very important role when data is not available as of the December or January deadline date. However, companies with data in hand are still submitting placeholder abstracts to avoid Reg. FD issues.
I argue that placeholders used in this fashion are detrimental because they do not contain full data. When someone is constructing a meta analysis or a review paper, they always start with a search of PubMed for appropriate abstracts. Placeholders will either be ignored, given less prominence than they otherwise should be, or cause additional work to try and track down the presentation from the author (a small percentage of presentations are archived on the meeting web site). If the author tracks down the actual presentation, they will be working off data that is above and beyond that in the citation (which is usually a "proceedings"-style citation to an abstract) and anyone wishing to verify their work will have to repeat the process of tracking down the presentation.
I'm sure anyone who has done research into a company who really only tells the whole story in presentations and posters knows the hassle I'm talking about.
re: ASCO
The abstract book is mostly useless for planning because it is not searchable. Having the abstracts on the web site is ideal. ASCO does post authors and a title on the web site for planning purposes, but the quality of the titles vary and sometimes a glance at the abstract means you can avoid adding a poster/presentation with repetitive data to your schedule. I can't tell you how many times we've nearly missed important presentations because it didn't show up in our searchable screens. That's one reason why attending ASCO has turned into a group function where our team and the teams from several buy-side and sell-side shops sit down over dinner a few times during the meeting to compare schedules.
Two years ago everyone was excited about a series of five pancreatic cancer late breakers because preliminary data submitted by the investigators was promising. I sat through all five presentations (back-to-back) and the data were bad in all five. One trial even showed the treatment arm underperforming the control arm at nearly statistical significance! I mention this to show honest mistakes can be made. While a company could spin things up in their abstract and disappoint later, I would hope the limited peer-review process would catch such behavior. The company would certainly be punished for it.
What we see now is companies submitting "placeholder" abstracts with only demographic data in them. This is their way around the selective disclosure problem. This is VERY harmful to the scientific community, in my opinion, because it is the abstracts and not the actual poster/presentation itself that is memorialized in the easily searchable scientific record. Authors doing meta-analyses or comprehensive review articles are more likely to miss the importance of abstracts (or the important data) when performing their searches if the only thing that is available is demographic data on the abstract. For those who do not have access to the actual poster or presentation, it is next to impossible to verify claims made in an article that reviews the poster/presentation, but cites only the abstract. This is a growing problem that makes ASCO's "it's better for the science" argument ring all the more hollow.
re: ASCO
The actual story at ASCO is worse than that.
In 2003, under pressure from reporters, ASCO released all the abstracts online simultaneously (like ASH does now). Members howled because it removed their ability to sell their abstract books to Wall Street. The very next year ASCO went back to selectively releasing the abstract books. ASCO releases abstracts early to members only, not all attendees of the meeting. ASCO staff has absolutely no good reason for this delineation.
The real problem is one of disclosure for the biotech companies. Even though the ASCO process results in a clear violation of Reg. FD, they cannot do anything about it. If they fulfill their duty under Reg. FD, ASCO pulls their abstracts (this happens every year to about a dozen abstracts). ASCO has a long memory about this sort of thing and one violation interferes with the ability to get an abstract accepted -- or, more accurately, to have an abstract be given a prominent oral presentation. If an abstract is pulled in this manner, you also piss off your investigator and lose the primary way for an oncology company to publicize its products.
There is an obvious double standard in that big pharma and big biotech will often flout these rules with no push back from ASCO. Since biotech companies cannot afford to take action unilaterally, an equitable solution can only come from the SEC.
The SEC's stand to this point is that Reg. FD does not apply to ASCO. Their conversations with ASCO have led them to believe investigators (also not subject to Reg. FD) are the ones submitting these data. Although that is technically true, investigators are under contract with the companies. Therefore, the SEC's initial stand is they have no jurisdiction.
We're working on that because the practice certainly circumvents the spirit of Reg. FD and clearly harms biotech investors without the money (or the defective honesty gene) to buy ASCO abstract books from ASCO members.
Luckily, PGS answered for me.
re: material disclosure
"..those that may sell who otherwise would not have, and who incur a loss relative to what they might eventually have sold for"
I agree. Despite a couple years of trying, we still have not made any progress with the SEC about releasing affirmative disclosure guidelines for biotech companies where scientific meetings and journal articles are concerned. We're making progress (I think) but it is slow progress. Biotech is an unknown black box to regulators. It takes days of explanation and a box of white board pens to get them to understand this complex and unique corner of the market.
re: open label trials
"When a trial is open-label how much access does the company have to the data? Does it vary by company and CRO?"
A trial can be open-label and the company can be blinded. In open-label pivotal trials, they often are. Open label strictly refers to the fact physicians and patients are aware of the drugs they are receiving. Data is sent to a CRO for analysis, usually, and the results are blinded from the company during that time frame.
In earlier phase trials that are open label, some companies keep a running tally and some don't. When a company says they "have no idea" how a Phase I trial is going, I usually make a note that they are not really being truthful. (If they tell me they cannot tell me how it's going, that's fine as long as I know they aren't telling anyone else either.) In Phase II trials, I give a little more latitude but I expect most companies also monitor those as well.
I find that most companies, regardless of the blinding method used, have some general idea how their trials are going. They at least know if there are odd side effects as investigators will call and ask about them and report them to the DSMB for the trial. It is also naive to think conversations between investigators and the company cease when the first patient is enrolled.
re: Material disclosure
"Unrelated question - Would the filing of a marketing application with the EMEA constitute a material event that needs to be reported? If the company does not disclose to anyone, can they get away with not reporting it?"
Reg. FD does not mandate disclosure of anything, of course. It only mandates any material information disclosed must be disclosed to everyone simultaneously.
There are other regulations (NASD, NYSE, SEC) mandating the disclosure of material information in a "timely" manner. The enforcement actions on this rule are few and far between, and limited to negative information. I'm not aware of any company being punished for not releasing positive information in a timely fashion.
The SEC specifically has refused, at least so far, to consider withholding information on trial data for publication or presentation as a violation of the material disclosure rules. This is despite multiple letters to SEC enforcement officials on the subject and follow-up inquiries from at least one member of Congress. I would argue this information is more clearly material than information related to a filing, therefore providing a clue as to what enforcement people would think.
Big pharma regularly hides such information, based upon the argument that a single marketing application does not reach the threshold of material given their size. I'm pretty sure that argument wouldn't apply to a dev-stage biotech company.
We also argue that the mere filing of an application should also not be the focus of new buying in a stock. Filing (and, post-Erbitux, the 60-day acceptance of the filing) are not de facto positive events. We believe they are significant events in terms of meeting stated timelines, but the real event is approval. That's a different question, of course, than whether the filing is material ("would a reasonable investor base a trading decision on this one piece of information").
For a small biotech, especially one with no products on the market, I think you can make the argument an EMEA filing is material. While they are likely in technical violation of the rules, I very much doubt if anything will be done about it. Since effective investor relations is an excellent window into the future operational prowess of a company, I'd be more concerned about what a decision to not release the information means to the quality of the management team than anything else.
re: "My picks are BPUR..."
We agree on something. I thought I was going to need to move to another city when we had the temerity to suggest back in 2002 people ought to run screaming from the stock and never look back. I find it funny they finally get to sell their product in South Africa now, some four years after they announced the original deal. I remember how much crap we got for writing that they were actually paying the government to use their product when everyone else bought the company's spin that the drug was approved and sales would be imminent there.
The SEC, for whatever it's worth, is still aggressively investigating the former management team.
That's why I said "macro" and "generally".
Point well taken, though. I have a whole client list of funds who buy individual names. I'll be more precise next time. Most of the guys I know who call themselves "macro" funds play the indexes, large baskets, and only do the largest names in each sector as individual stocks.
re: biotech buying pressure
"Part of the buying may be related to macroeconomic factors -- specifically, high natural resources costs, which are of course essentially irrelevant to biotech."
I agree 110% with what you wrote. Macro-driven buying usually comes in the form of indexes and baskets as macro hedge funds are generally scared to death of buying individual biotech names.
Along the lines of short selling, this comes from Sentiment Trader's Jason Goepfert courtesy of the Minyanville.com site.
http://www.minyanville.com/articles/index.php?a=9548
Jason and I bantered extensively on the site (I also write for Minyanville) about how the SEC's Reg. SHO could have skewed these data beginning in 2005 (he refers to this in the article), but the indicator accurately called lows in the spring and fall of 2005 anyway.
re: indiscriminate buying
It's matched by the indiscriminate shorting that has been going on in the sector. Short interest in the NBI as a percentage of overall NASDAQ short interest has gone from 10.7% two years ago to 12.7% in the last period. That's impressive on its own given the NBI is only 160-ish stocks, but is especially noteworthy given that overall NASDAQ short interest has climbed 28% in the same time period.
Short interest in the average NBI stock was up 22% in 2005. Someone(s) made an exceptionally large short bet across the entire index in late September and early October and a slightly more selective renewal of that short bet in the most recent measurement period. Short interest in the IBB was up 24% in the last period.
That said, the atmosphere at the JPM conference was much more upbeat this year. People (including us) expect many product partnerships and company acqusitions in 2006 as biopharma and pharma replenish their pipelines in the face of generic competition and safety-based drug failures. Others who use a more technical basis for their investing are assuming the 2005 divergence between the NBI and the BTK will close. Both macro views lead to "indiscriminate" buying.
"Indiscriminate" seems to cover both sides of the trade lately.
OK, one more try...
"What I think is that your subscription-oriented business model precludes your speaking objectively about the companies you follow. You’re not the only newsletter writer with this conundrum, but it’s a conundrum nonetheless."
Only someone who does not read our research can suggest we only say positive things about the companies we cover. Anyone who has actually read our research knows we can be plenty negative when necessary. They also know we include the other side of the trade in nearly everything we write. I know from experience that making sure everyone understands the bear case in a stock and/or warning people about a stock they are buried in creates more customer loyalty (and a much bigger customer base) than doing what you accuse me of -- sugar-coating the research to affirm the biases already present when the become subscribers. People, especially professional investors, pay us precisely because our independence allows us to say exactly what we're thinking. It is one of the things our subscribers tell us they most highly value about our research.
"It did not occur to you that two CFO departures within a matter of months might suggest something sinister because your raison d’etre is to present DNDN and the other companies you follow in a positive light."
First, see above. Second, after five years of covering Marty's company and living in the same town as all its employees you get a pretty good sense of what is going on beyond what you see in press releases or news articles. Marty left to spend more time with his son. Just because you and I might not be family-oriented enough to make that choice, doesn't mean there is anything sinister about his departure.
Of COURSE it occurred to me that something might be very wrong when I saw the announcement. After several phone calls, a lunch date with Marty himself, and more than a couple of beers with people in the Seattle biotech community we knew the facts. The *facts* show it was nothing sinister. If you care to believe otherwise, you certainly won't be in the minority. Please recognize that just because most people think something to be true doesn't mean it actually is.
Dew, have you never been quoted in a newspaper before?
Contexts are often lost between the conversation, the reporter, the editor, and the reader. Only a fool would say what's been happening at Dendreon since early December is "normal" (transition or otherwise) and, contrary to your oft-stated opinion, I'm not a fool.
Oddly enough, the reporter never asked me about the CFO leaving. The only part of our conversation that was about the CFO was the fact the reporter noted Burris called him to spin her departure as voluntarily because she thought that was not made clear in the poorly-written PR issued by the company.
Everyone in the community here knows why Marty left and most of us feel Burris never should have been hired in the first place after burying Corixa under a mountain of convertible debt. People can legitimately wonder why Burris left, but the question of why Marty left was answered long ago.
Since everyone knows why Marty left, and I was pleased to see Burris leave, it never would have occurred to me to make the statement you suggested I should. As to what the events of the last two months mean for Dendreon, you'll forgive me if I reserve those comments for my customers.
And that brings up a point worth mentioning...
I hope everyone reading this message board realizes my inability (refusal) to share my specific opinions on the companies we cover makes me an easy target for Dew and others like him. The easiest response to Dew would be to compile some of my comments about these events from our published research and add in thoughts from upcoming research notes. This would not only provide necessary context to our coverage of Dendreon, but would address the central thesis of Dew's argument.
Dew attacks me here and at the Yahoo board because he knows it is a win-win for him. He gets to score easy points because he's smart enough to realize I cannot respond fully. If he's wrong there and I do respond fully, then he still wins because publishing our research on a free message board (a) pisses off my paying customers and damages my business; and (b) it appears on the free message board he has a personal interest in making successful.
It's a common ploy in this business, but those outside it may not realize that's the subtext here. Hopefully now you do.
It's been interesting to learn how many of my subscribers have paid iHub money just so they can monitor what Dew says over here about me and the companies we cover. Pretty smart marketing ploy, particularly since he gets to do it anonymously and has nothing to lose professionally by doing it.
re: torcetrapib
"On the other hand, you think this would not be enough."
Not precisely correct. It will sell fine until it runs up against the hard endpoint of morbidity/mortality and it will then not sell much at all.
RFJ's point is well taken concerning a 20% advance in LDL reduction will affect morbidity and mortality. Current thinking is the more LDL drop the better. Whether a clinically signficiant boost to morbidity/mortality will occur depends 100% on how many people don't reach the target LDL level on Lipitor monotherapy. Below a certain point reduction in LDL has diminishing returns on that hard endpoint. Will there be enough Lipitor "non-responders" to drive a m/m benefit?
This certainly will be a set of trials that answers many questions about lipid science.
David Miller
BSR, LLC
No positions in the companies mentioned at the time this was written.
re: torcetrapib
We'll agree to disagree, then. I respect that. No need to be belittling or introduce acrimony into the conversation.
David
BSR, LLC
Re: PFE’s Tocetrapib
LOL... If it were simple, this would be easy and we'd all be jillionaries...
If there is no mortality/morbidity benefit, torcetrapib will be a commercial flop -- eventually. Nothing said on the conference call contradicts that.
I'm all for the multiple swings and agree in general. All of the swings he has ultimately depend on RLT. Scant scripts will be written for torcetrapib if it proves to have no mortality/morbidity benefit.
Is there a great deal of money that can be made on Pfizer's stock between now and those data in 2008? Certainly -- and maybe even off the IVUS data and maybe even off an approval.
That is why I'm so careful to distinguish my comments as (1)In the minority; and (2) specific to the science and not the stock.
David Miller
BSR, LLC
No positions in any stockss mentioned at the time this was written.
re: PFE webcast torcetrapib portions
Mr. McKinnell didn't say anything that contradicts my views on torcetrapib. He referenced their Phase II trial and provided some new spin, but the actual data from that trial do not demonstrate reverse lipid transport (RLT). The core to my argument is RLT is the only thing that can provide morbidity/mortality benefit in terms of an HDL mechanism.
(For your timeline tables, Dew, you might want to include items noting IVUS data won't be until late 2006, morbidity/mortality data not until 2008 according to the call if you haven't already done so.)
I absolutely agree with Mr. McKinnell about how revolutionary torcetrapib would be if it does RLT. My "disagreement" is whether the drug does RLT. There is zero data available to my knowledge that shows it does.
He also talks about perhaps seeking approval based upon HDL boost, which will absolutely be a hard row to hoe. He acknowledges that on the call.
He mentions a label perhaps with torcetrapib potentiating Lipitor's LDL lowering (boost it by 20%) -- i.e. not based upon IVUS or HDL. That would not be received as well in the marketplace and would require a *very* clean side effect profile, in my opinion, to get past the FDA.
He notes Pfizer will file with "what they can get" right away, but concedes the important data will morbidity and mortality. The EU is already making noises they want to wait for the morbidity/mortality data. If torcetrapib goes to an aggressive panel and the IVUS data is marginal, I would expect the FDA to require the same. At the least, I would expect a conditional approval. In the back of their minds will have to be wondering what they will do if they approve the drug, allowing Pfizer to market it for two years, and then find out it has no real benefit to patients. Since the PDUFA data for a torcetrapib filing is likely to be mid-to-late-2007, that makes waiting easier.
He also asserts that IVUS reductions would be "proof" of efficacy beyond lipid level manipulation, but goes on to note they don't know what the FDA will do with those data (can you believe they spent $800M on a pivotal program with no SPA!?!). The key to this question is "how much is enough", which he acknowledges on the call remains an open question. This has not yet been quantified in the literature. I argued in 2003 that the 4% seen in the Esperion trial was significant due to comparisons in plaque reduction from other studies.
McKinnell: "It is an important scientific question to learn whether raising HDL will provide the same benefits as lowering LDL. That's something only Pfizer and, by the way, $800M can even attempt to answer. IF the answer is yes, then we have a winning combination."
That also does not contradict what we've written over the years on HDL. I argue a rise in HDL is automatically not clinically relevant. This differs from what we know about LDL. A drop is LDL is assumed to be clinically relevant. The FDA agrees since they explicitly refuse to approve drugs based only upon an HDL boost. Japan Tobacco and AVANT's failed anti-CETP trials also support this view (to varying degrees).
Even I will be (a little) surprised if the current torcetrapib clinical trial program does not demonstrate statistical significance on some endpoint -- particularly the low hurdle of boosting Lipitor's LDL benefit. Whether that difference will be clinically significant on a hard endpoint (morbidity and mortality) is my biggest question.
I restate that I am on the sidelines here as far as an investment in Pfizer is concerned. My argument is purely a scientific one and my viewpoints are in the minority (though no longer a minority of one). Hopefully that is clear to everyone here.
David Miller
BSR, LLC
At the time this was written, I have no position in any ofthe companies mentioned.
re: repatriation rules
Each company is required to file a plan on how the repatriated money is to be spent. Companies were advised, in true IRS fashion, to "be specific" in the plan on one hand and also advised "there is no need to, for example, specify specific programs" on the other.
The AJCA legislative intent on repatriation strongly suggested the money needed to be spent within a certain time frame. Some tax lawyers were out saying the money should be spent before the close of 2005, but that was before the IRS took a very long time to formalize their rules. Also contributing to the confusion was the legislative rule that companies had a 1-year window to bring the cash back -- "back" does not mean "spend".
The IRS rules provided no hard deadline, though they echo the legislative intent by noting the spending plan should specify the repatriated funds be used in the near term. Our sense is that most repatriation plans concentrate on 2H-2005 and 2006 for the spending, with 2006 being the "big" year.
The penalty for not following AJCA guidelines and IRS rules is 30% of the cash repatriated. Since repatriation plans filed with the IRS were required to be approved by executive management and the Board of Directors, deviations would also cause SarbOx problems.
David Miller
BSR, LLC
re: 454 tech and sequencing
I think 454's tech is fascinating and so do most of the techies we talk with. I am cautious of the "picks-and-shovels" trade as a rule in biotech. Because of that we don't pay much attention to the sequencing companies, so I cannot answer your question directly.
The HG project received the most press, but the real advances will be made when we map the proteasome. Companies able to effectively translate that research into products with a lower-risk clinical development profile interest us more than the companies doing the hard number crunching.
We're pulling the ripcord for the holiday season here at BSR HQ. Warmest wishes for a safe and happy holiday season and a profitable new year to everyone.
David Miller
BSR, LLC
No position in the companies mentioned at the time this was written.
Re:Torcetrapib combo, Esperion, and Pfizer
You are welcome. I do not know the status of the oral drug for certain. I only know the plan was to bring it along slowly in targeted niche applications post-acquisition and that it would have entered the clinic in 2004 if ESPR would have stayed independent.
I'll pass on commenting on AGIX in this forum (as a general policy) other than to say the deal is part of an overall larger macro trend we expect to see accelerate in 2006.
David Miller
BSR, LLC
At the time this was written, I own no shares of the companies mentioned here.
Re:Torcetrapib combo, Esperion, and Pfizer
It was a billion-dollar insurance policy driven by a competitive bidding process. Pfizer had the right of first refusal on the drug that put ESPR's science into the limelight. ESPR received an offer for the product, which turned into an offer for the company. Pfizer bought them in a competitive bidding process. Merck was rumored to be the second-place bidder, but we never expended any energy trying to confirm that.
As I alluded to, I haven't had any contact with the team for some time. The deal with Pfizer allowed ESPR to stay as an independent division, but clinical trial decisions were to be made by Pfizer. Because trial design and data are not considered material by pharma until late in the process, the silence on ESPR program does not necessarily mean Pfizer broke the agreement. As I said, I expect the oral drug is a backup to torcetrapib.
As far as Dew's assumption about torcetrapib/IVUS is concerned, he might be on solid footing with his guess about the trial design. Since Dr. Nissen is a key figure in that trial because of the use of IVUS, there is a good chance there is some sort of control. That item is certainly one thing I would want to know for certain before placing a large bet the trial will be successful. Since my interest in this story is mostly personal, we haven't expended any of the firm's resources in trying to find out for sure nor have I spent much time on my own in an attempt to learn the protocol.
In any case, that portion of my post was less about the torcetrapib trial than an effort to educate concerning a not commonly known aspect of IVUS in clinical trials. If it was received as disrespectful, I apologize.
David Miller
BSR, LLC
At the time this was written, I have no position in any of the companies mentioned.
Pfizer clarification and IVUS notes
To reinforce what I wrote on Pfizer, I said I expect the trial to show statistical significance P<0.05. Clinical significance will be a matter of debate. I believe the risks are such that whichever way one is positioned on Pfizer when the data finally arrive, one must protect against a significantly high chance of a tail event.
As to IVUS, I am lucky enough to have worked closely with a private company who produced the coils used by Dr. Nissen in the ESPR trials. IVUS is an invasive intravascular procedure whose readings are HIGHLY sensitive to the speed with which the device is withdrawn, the exact starting location, and the exact ending location. For those who were paying very close attention to the 2003 ESPR trial that made a household name out of Dr. Nissen, the trial was as much about seeing concordance between IVUS measurements as it was about the dramatic results seen from the drug. Prior to this trial, the gold standard in clinical practice and for regulatory purposes was an external ultrasound technique.
In every demonstration of IVUS I know of, measurements are best regarded as cardiologist-specific. I believe Dr. Nissen would agree to a point, amending my assertion to say that his team at Cleveland Clinic shows a particularly high degree of concordance. That claim is the basis for his salesmanship of his clinic as a centralized IVUS adjudicator (a point referenced in an article posted here in the last few weeks).
If Pfizer randomizes by surgeon/cardiologist (as in ZymoGenetics' rhThrombin pivotal trial), then the point is probably moot. If they have some sort of centralized IVUS center where a limited number of cardiologists perform the IVUS (akin to centralized radiography adjudication in oncology trials), then it also might be a moot point. I suppose a third way would be to have more than one cardiologist take a reading, but because it is an invasive procedure and there are health risks (dislodging plaque, infection, etc.) I would very much doubt that was the measurement protocol.
Any IVUS-based approach that does not use one of the first two approaches should be looked at with at least as much skepticism as investigator determinations of objective responses in oncology trials. Whether the community will be skeptical (if appropriate) of IVUS in terms of the torcetrapib trial is an unknown since science doesn't always drive behavior.
Happy Holidays,
David Miller
BSR, LLC
One or more BSR staff members owned a long position in ZGEN at the time this was written. See the Disclosures page on our web site for more detail.
Torcetrapib combo, Esperion, and Pfizer
I've hesitated to post here for a couple of reasons, the most important of which is my desire not to dilute what my Subscribers pay for. Comments on a big pharma and a company we covered positively from $6 to the $35 buyout seems outside of those bounds, so...
I am one of the few people who think the torcetrapib trials will fail to show a clinical benefit on morbidity and mortality. Will the trials show a benefit on IVUS (intra-arterial ultrasound)? It depends on how badly the investigators want the trial to succeed given that IVUS is notoriously subjective outside of the hands of a handful of people trained by Dr. Nissen. Will the trial show some statistically significant results? Probably, given the enormous n, though I think it interesting the trial data are delayed over a year.
Why do I think the drug won't have a benefit to morbidity and mortality? The short answer is that durable regression of atheroscerotic plaque requires reverse lipid transport (RLT). CETP-inhibition increases HDL, but has not been shown to promote meaningful RLT. The Phase II study recently released by Pfizer implies it does, but the study (purposefully, in my opinion) does not look at excreted lipids. Lipid mobilization in the body is a necessary part of RLT, but it is only an intermediate step. No excretion, no RLT.
I invite those interested in HDL and RLT science to take a look at our April 2002 issue. It is available on our website (BiotechMonthly.com) for no cost (Free Issues), so I do not believe am crossing any boundaries by suggesting that since I gain no revenue for directing people to it. And you won't get any spam from us. Please keep in mind the issue is almost four years old, so much of the rest of it will be dated. There is enough in there on HDL and RLT to still be of interest.
The decision to combine torcetrapib with Lipitor is mostly as PGS suggests. Primarily, it is to extend the patent life of Lipitor beyond the end of this decade. The recent successes of Vytorin (Zocor + Zetia) points to a shift in prescribers' opinions on combination drugs. If my friends who analyze big cap pharma are correct, Vytorin was the only statin to show sales growth in the last quarter. That trend will be exacerbated next year when Zocor goes off patent.
All statins have unfavorable side effect profiles. These side effects are cumulative and present in a large part of the population. The higher the dose, the worse the problem. If doctors can combine a low-dose statin with another drug and reach target lipid levels at lower toxicity, that combination will be a huge seller.
That's the beauty of Vytorin. While a smaller number of patients see more liver toxicity with Vytorin than they would with Zocor, most patients do better on the drug since Zetia has a better side effect profile. There are additional benefits from Vytorin, including a better effect on HDL than with Zocor alone.
Esperion's lead drugs were for acute care (IV), but their oral formulation (which we unabashedly called their "oral wonder drug") was less than six months from the clinic when they were acquired. This drug reduced LDL and boosted RLT in preclinical studies. In the last communications we had with Esperion personnel, the program was going to be slow-tracked into targeted populations (diabetics and those with genetic lipid abnormalities) while Pfizer focused on the torcetrapib trials.
For those who don't know, Lipitor wouldn't exist were it not for the Esperion management team. They rescued the drug from the dung heap and championed it through approval (before founding Esperion, of course). We found them to be an exceptionally gifted team. I mention this because they were convinced CETP-inhibition would not work. Their views were borne out by the results of an anti-CETP vaccine developed by Avant and an oral CETP-inhibitor by (I think) Japan Tobacco that have already failed clinical trials.
Assuming Pfizer kept their committment to the Esperion management team on the ESPR oral drug, if the torcetrapib trials fail there will be JUST enough time to get the ESPR drug into pivotal trials and on to the market before the Lipitor patent runs out. Because the ESPR drug was designed to significantly reduce LDL, that much faster surrogate endpoint pathway is available. Torcetrapib has no meaningful effect on LDL, and the FDA refuses (and rightly so) to use an increase in HDL as a surrogate marker for efficacy. Pfizer would be down in such a scenario because they would have to do a gaggle of marketing trials to catch the ESPR drug up to Lipitor, but they wouldn't be out of the game.
David Miller
BSR, LLC
(I have no position in any of the companies mentioned)