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This is good news, because it lays to rest the question of whether cor sought to bury its own data.
Does anyone have a feel for whether this will be anything more than a post-mortem on cx-717's post-mortem artifact? In particular, does this change the slim-to-none odds that a possible reactivation of the IND might occur?
Is it possible for cor to divulge the contents of the letter?
I think it is probably a bunch of reasons. At ~.50, cor has likely attracted a large number of buyers who are strictly short-term. If the charts start going south because of a large holder's year end sell-off, they're more likely to dump than hold.
Near-term, based on my understanding of the science, my sense is that the RD will pan out, with the caveat that in human subjects, a placebo effect could contaminate the data (i.e., even though the neural substrate controlling autonomic breathing is highly conserved, in humans, volitional control exists as an override, and in a cohort of people who can probably figure out that RD is the target of the study, they may attend to their breathing and thus mitigate the opioid-induced depression). I am more comfortable with scientific binary events than regulatory ones, so I feel cautiously confident about the RD trial.
I also think that Stoll's point of multiple shots at goal exist this year. This is both a hedge against any one study not working, and if more than one positive result comes down, I think that the cumulative effect will be non-linear.
When I look at the larger context, I see a positive and a negative. The positive is the IP situation of the cash-rich big pharmas, for whom cor's IP is probably very attractive. The negative is that I think that cor will have a much harder time finding anybody to pony up money to fund continuing operations if/when their cash runs out. Despite their excellent pipeline, they could run out of funds.
I am also a bit worried about the incentives within which cor management is operating. Their options are all underwater, so for them, given a good bet that would raise SP to ~$1.50 vs a longer shot that might raise SP above $3.00, they are likely to go for the longer shot, since they have nothing to loose.
Ombowstring,
At different points you've been willing to say what you think of cor's prospects. What's your outlook now?
He can't state that it's clean, because he can't do all possible tox experiments.
In the earlier CC he was quite emphatic that if the FDA were presented with a clean compound for ADHD, they wouldn't balk at approving it, and then proposed to submit an IND for ADHD using CX-701. This suggested to me that he was pretty confident that there were no big problems with CX-701.
Another problem with this 3 vs 13 year argument is that by 2014 (and even more by 2027) this, and perhaps any other ampakine may be obsolescent anyway. Fixating on the patent life ignores the reality that there are a lot of smart people out there pursuing different and perhaps more powerful therapies.
This shift away from CX-701 is nuts.
If cor had the luxury to make that choice, it would be fairly obvious. Right now the reality is they are cash poor, and the 3 month timeline could be disastrous if the new compound runs into problems. They won't have the funds for a plan b. I think it makes more sense to go ahead with CX-701, while completing the tox on the newer compounds. If/when the toxicology pans out, they can serve as a backup for the supposedly clean CX-701.
Am I the only one who thinks that dropping CX-701 is nuts? They haven't even completed toxicology on the two new compounds! My sense is that cor's management bases decisions on comparisons of the upside of alternatives, and disregard downside risk. There are enough potential indications out there that the newer compounds will bring in plenty of revenue.
On the slide where the next year was mapped out, Stoll spent a good deal of time discussing the inlicensing bullet, and skipped the M&A bullet. This doesn't look like a high priority.
It sounds like they are putting 701 on the back burner, based on patent life. He estimates a 2-3 month loss as the cost of the switch to one of the newer compounds. More swinging for the fences.
It looks like the selling may have stopped.
I think there is some naked short selling going on, hiding behind legitimate end-of-year selling for tax reasons. The volume of shares being exchanged at these prices just doesn't make sense.
What you're outlining would be spectacular, but also makes sense because all parties would benefit. The sums required to change COR's outlook are so minuscule compared to the sums BP routinely shells out to bring drugs to market that this kind of a partnership looks like a no-brainer. Given the state of the BP pipeline, sooner or later something like this has got to happen.
I've been buying in small batches (2-3K), basically to improve my dollar cost-average. It would be wonderful if the year ended better than I've been expecting it to.
There is another interpretation of Coleman's buying: it may be a hedge against a worst-case scenario where RD etc. goes badly. He probably has the best idea of anyone at the company about the worst-case buyout value of COR . That sale price is likely below the the threshold at which options kick in, but well above the current sp, so it's a way for him to guarantee getting something out of the whole deal. If COR does well, obviously he makes money too.
I agree about the kvetching part. You could improve things if you'd make your comments less derogatory and personal. I read this board for information, and find that the personal attacks definitely get in the way of the exchange of information.
Just because I disagree with someone doesn't make them a jerk.
Are you sure the size of the buys are relevant? The minute you're buying shares in the thousands, if the stock appreciates rapidly, it seems to me that you have to worry about problems with the SEC.
Although I think you're engaging in wishful thinking, I very much hope you're right.
My enthusiasm has been tempered by the size of the buys. If I had access to the kind of information that we hope they have access to (i.e., positive tox reports, feelers from BP, etc.), at these prices, I'd be buying a lot more, particularly if I were interested in sending a bullish signal at the same time. My sense is that senior management at cor are just as uncertain about cor's future as I am.
I've only been tracking cor since 8/06, but my sense is that the compounds in development are more promising than those cor had before. I think cor's earlier high valuation was based on a sucessful sale of the idea of ampakines, which has failed to deliver.
Going forward the strategic challenge for cor's management is to sell ampakines as products (rather than as an idea) to a new group of investors.
I think that the way they need to do this is by bringing drugs to market for any indication at all, so as to establish POC of ampakine efficacy and safety. The silver lining to our current dismal situation is that cor's disastrous situation has forced cor to pursue RD rather than ADHD, because this disregarded indication is likely to gain FDA approval (and to do so faster) than the block-buster indications, which I think were the first choice of cor's management. Once efficacy and safety are established for niche indications, the FDA will feel less skittish about the bigger indications, and the BPs will come.
I think what we may have here is the worst of both worlds: anemic insider buying for PR reasons, which is insufficient to change how the stock is viewed, yet the insider buying likely implies that the kind of good news that would lead to SEC scrutiny isn't in the offing either.
I think cor's ampakines remain extraordinarily promising as a class, but I think we are in for a lousy, miserable 2008, in which if we get back to zero (i.e. something around $2 where many of us are averaged out at) we will all have something to celebrate.
Cor needs multiple shots at goal, but is so strapped that it has basically one good shot left, for an indication that is pretty tangential to the indications its compounds are most promising for. Cor's management has yet to figure out how to generate cash flow or form lucrative partnerships, so the enviable IP may be moot. I don't mean to imply that the management is inept -- they're not alone in this predicament. They're just not extraordinary, which is what the IP deserves.
I am not expecting anything other than the same stuff reshuffled in nyc 12/5.
Does anyone know the RD experimental design? If its just ctrl vs experimental (i.e. fentanyl without and with CX-717 at fentanyl doses sufficient to slow breathing), then lack of significance could arise out of placebo effect: we have volitional control of breathing, and if the subjects in the trial know the purpose of the study, their expectation of an effect may lead them to pay more attention to their breathing, obliterating the effect of fentanyl.
How do we listen in on this conference?
To quote from the abstract you cited:
"Schizophrenia is a chronic, complex and heterogeneous mental disorder, with pathological features of disrupted neuronal excitability and plasticity within limbic structures of the brain"
Lilly's eventual success via mGluR modulation doesn't in any way preclude the emergence of an equally effective drug that targets AMPARs. Different drugs with different pharmacological targets will broaden psychiatrists' options, but I don't think that any one drug is going to be a silver bullet for a patient population this heterogeneous.
I hope, for all of those running around enduring the horror of schizophrenia, that Lilly's drug is effective. I'm not at all worried that COR is getting scooped. Ampakines may be equally effective, and these two classes of drugs may be synergistic.
I'll bet you a nickel that this will be the main revelation of the 12/06 presentation. New tox data might also explain the insider buying.
I didn't get much from the letter. I got more from the insider buying. I've tended to see the lack of transparency re: the ADHD IND in a negative light. The insider buying is more consistent with a "cop a plea" hypothesis than a "skeleton in the closet" hypothesis.
Can someone tell me how far along the CX-701 toxicology work is? My hunch is that the 12/06 presentation will contain a good deal of information about how clean this drug is, even at very high dosages. Such news would be understood by at least some people.
His letter strongly suggests that despite what the ombudsman told me, cor is expecting a written response.
I'm beginning to feel a bit better about this whole disaster.
The thrust of my letter was a request for more transparency regarding the FDA ruling. There are plenty of reasons for why it would be inadvisable or impossible to tell us more about what transpired during their interactions. As far as I'm concerned, insider buying is quite eloquent. COR's biggest problem is that it is relatively cash-poor, and everything suggests that for the next while, raising funds for anything is going to be harder than it was. The insider buying suggests that based on what they know but can't tell, the likelihood of getting favorable outlicencing, or favorable M&A activity is high.
This suggests to me that there was a "cop a plea" component to the inactivation request. The FDA could have just asked them if they didn't have anything cleaner. The fact that a better drug (CX-701) was getting ready for testing may have doomed CX-717 as much as anything else. Whatever the fixation artifact was, CX-701 doesn't show it, and the FDA may have informally let it be known that they would be much happier with a cleaner drug. This is very much in line with something that Neuro floated some time back. The point I'm trying to make here is that if CX-717 was the only drug in the pipeline, the chances of the FDA accepting it might have been better.
The more they buy, the better I'll feel.
Here's my correspondence to stoll re: inactivation.
I wrote
Dear Dr. Stoll
I am a shareholder in cortex, a neuroscientist, and someone who has loved
ones suffering from neurodegenerative disorders. I invested in cor because I
believe in the science, and because I very much want to see ampakines
provide treatment for AZ, PD, and other indications for which they appear to
have so much promise. I am prefacing my comments with this information
because I want to be clear that above all, I want cortex to succeed.
I spoke with you during the last CC, when you discussed the way forward in
the wake of the ADHD inactivation. I found it unacceptable that nearly a
year of work and over a million dollars invested in preparing documents for
the FDA appeared to be summarily dismissed by the FDA in their negative
ruling, which was conveyed to you verbally, and which led to your
inactivation of the IND. In the opinion of Neuroinvestment (his handle at
Investor's Hub, where I post as enemem) leading up to the FDA, the
likelihood of an outright rejection was seen as minuscule, and based on
everything I could glean from the FDA website, this unilateral decision was
at odds with the iterative approach that they describe, whereby the FDA
conveys its problems with an application to the applicant, and the applicant
is given the opportunity to respond. As a consequence, I feel that the FDA's
response was anomalous, and casts CX-717 in the worst possible light for the
investment community.
I emailed the ombudsman at the FDA to find out whether the FDA had any
intention of giving cor a written explanation of why they rejected CX-717,
and was informed that when a company inactivated an IND, a written
explanation was no longer needed. As a consequence, my impression is that
there will never be an airing of what FDA's problems with CX-717 were. At
one extreme, the FDA's decision can be seen as a purely political decision,
designed to shield the FDA from any eventual fallout associated with
unforseen problems with CX-717 in the treatment of a non-lifethreatening
disease. At the other extreme, CX-717's failure can be seen as an indicator
that the whole ampakine platform is tainted.
I am writing you to suggest that as much transparency as possible
explaining the grounds for the FDA rejection would be helpful. If it is the
case that there were legitimate problems with CX-717 that could not be
accounted for as post-mortem artifact, this information could be used as a
benchmark against which other safer ampakines could be compared. If it is
the case that the FDA exceeded or ignored its mandate in reaching its
decision, it is of course much more problematic for you or any other cor
spokesperson to state this directly. An explicit presentation of whatever
insignificant problems there were regarding CX-717 might convey this
information, in a form that would allow cor shareholders to get a better
sense of the extent of the problem with the FDA.
I would be delighted to hear from you, but fully understand if time or
cofidentiality constraints preclude a response to this email.
Yours
He wrote
I think that Cortex has done all it can to clarify a
position which the Psychiatry Division articulated in its telephone call to
the company. We are following up with the agency to determine if we can get
a meeting of experts with the Psychiatry Division to review its response.
We are also following up to determine if and when a written response can be
expected. Until we get further clarity from our consultants in
Washington,DC,and from the Psychiatry Division, we can not add to the
information which we have already provided to the market place. We can not
and should not speculate, but must issue further information solely on
responses from the agency. Roger
Neuro
I think there are plenty of countervailing reasons why cor might legitimately not wish to disseminate this information at the level of detail that I think would be helpful. Their decision not to doesn't make them liars. I wasn't being disingenuous.
I'm not even that much of an absolutist about lying, as I've tried to convey: it may have been in COR's interest, and by extension the shareholders' interest for Stoll to withhold information regarding COR's interactions with the FDA. I just think that more transparency now would be helpful.
Def a lot harder to accurately convey the contents of a conversation in writing after the fact.
I don't want to antagonize or bait Stoll, I just want to know if cor has any intention of disseminating information regarding the grounds for CX-717's rejection, and cor's inactivation of the IND.
Here's a hard question: if you feel that calling him is the way to go, why don't you do it?
I have no problem talking with Stoll, and did so during the CC (I was even castigated for impugning his honesty). Did you?
At the time of the CC, I didn't have the information from the ombudsman, so I was unable to ask the questions I'm raising now.
In the interest of not distorting Stoll's eventual response, I will email him rather than call him. If/when I get a response, I will post my email along with his.
You're conflating R & R with the market. Retail investors and even money managers look at the science behind ampakines the way I look at superstring theory, and they likely base their decisions on second-hand sources, most importantly the FDA. What they have learned is that the FDA peremptorily denied cor's IND. If they know a little more about the FDA process, they will recognize that this is a relatively rare event. As such, it lends even more credence to the idea that ampakines are unsafe. Whether ampakines are or aren't safe is irrelevant, it's the perception that matters.
I keep harping on the psychiatry ruling, because I feel that what happened was quite anomalous. Leading up to the decision, Neuro placed a 30% probability that there would be discussions between COR and the FDA that would extend the decision date past 10/11. Because of the timing of the inactivation announcement (ON 10/11), it seems unlikely that much was discussed (alternatively, somebody at the FDA plowed through the 6' box and got comments to COR in time for negotiations to be finalized by 10/11). My inference is that there was a communication between the FDA and COR that one or both parties wish to hide, either pertaining to a deal, or to aspects of the histology that cannot be ascribed to post-mortem artifact. I find it hard to believe that COR inactivated the IND without knowing that the inactivation would obviate the FDA's requirement to submit a written response. Thus Stoll's suggestion that COR is awaiting a letter from the FDA strikes me as misleading.
The lack of any information about the grounds for CX-717's rejection, and the mismatch between the expectation created by Stoll's various comments leading up to the IND, and the actual outcome, have both tarnished the ampakine platform. For the overwhelming majority of potential investors who don't have access to the science, or don't have confidence in their ability to interpret it (as well as the cohort of investors who bought into the story or the science and have been burned), this stock is unattractive.
I would actually prefer it if there were a non-trivial histological problem with CX-717, because if CX-717 was to all intents and purposes clean, and psychiatry peremptorily and arbitrarily shut it down for political reasons, then one can only conclude that an understanding of the clinical data is of little help in predicting the probability of a successful IND submission. Obviously, if the FDA failed in its regulatory role, it would be impossible for COR to point this out. However, if there were problems with CX-717, it might be in COR's interest to be more transparent, because it could reduce skepticism towards ampakines as a class, it would bolster Stoll's credibility, and it might reduce the level of paranoia about the FDA. Being asked to forget the past and focus on the brilliant future is a poor second choice.
I would love to be able to pin CX-717's rejection on an unprofessional, cowardly beurocracy that oversteps its mandate. While this may in fact be true about the FDA, I think that their reasons were more substantive, and likely communicated to COR via informal discussions. I think the option to inactivate the application makes it very difficult to get any information whatsoever about what happened.
I don't think a letter from the FDA will ever be sent. I would be delighted if my somewhat paranoid take on all this turned out to be wrong, and certainly receipt of a letter by COR would be inconsistent with what I've proposed. It would make me feel better if I once again felt that I could take Stoll at his word.
I think that the stock is being traded at current values because ampakines as a class have come to be viewed as unsafe. Anything that cor could do to clarify the grounds for the FDA's rejection would be useful in this regard.
In the posting you cited, I wasn't discussing RD. I was contrasting the differences between the neurology and psychiatry INDs.
I will however, make an effort to read your posts more carefully.
Junkies who want to die can die every time they shoot up. Most of them live a lot longer than anyone expects them to. In their own way, they're careful. A vendor who, by adding ampakines can bring a junkie a more intense high without risking death would likely make some good money. This does have implications for opiate abuse.
>>>If there was some secret safety problem that was going to blow up, Neurology would not have given the OK either.
This is exactly the same argument you used to justify your confidence that psychiatry would OK the IND. We all know what happened to that submission; don't you think it might make some sense to examine the logic of your argument a little more closely?
It is not unreasonable to propose that approval criteria for a one-shot PET scan study for a lethal disease for a patient cohort at the end of their lives will differ from approval criteria for a chronic administration in a healthy population for a non-lethal disease.
Cor at this point knows everything that can be known about the CX-717 histology anomaly. If this anomaly could be completely accounted for as a fixation artifact, would you consider it correct to simply inactivate the IND, rather than engage Psychiatry in some kind of a discussion? Why go through the theater of the 6' box if you are willing to see its contents summarily ignored?
As you write, Stoll is honest, almost to a fault. If what I am arguing is true, an honest-to-a-fault Stoll would have held a CC and said (around the time of the financing) "there are histological phenomena we are encountering with high doses of CX-717 that cannot be completely accounted for as post-mortem artifacts. In light of these findings, we are passing on an IND submission for ADHD". If he had done this before the financing, the financing's terms would have been beyond toxic; if he had done it after the financing, he would probably have had legal trouble with those who bought warrants. I don't think he had good choices, and I'm not sure he made the wrong choice. He went along with the theater, and then inactivated the IND, obviating the FDA's obligation to submit a written justification.
What smells funny is that Stoll still pretends that he is expecting a letter "any day now". For this to be true, he would have to know less about how the FDA works than I do. If I believed that, I'd feel lucky to find a buyer at 0.30.
No abuse potential? Ampakines added to street opiates could (if RD pans out) substantially lower the risk of overdose. For better or worse, finger-poppers the world over are going to be beating a path to Cor's doors if and when this drug makes it to market.
Here is the ombudsman's letter again, with the relevant passage in boldface:
FDA cannot legally acknowledge the existence of investigational drug
applications (or even new drug applications if they have not been
approved yet) unless, of course, FDA is communication with the sponsor
of the application.
What I can tell you is that FDA reviews IND submissions but any written
review of an IND cannot be made public. We do, however, share our
comments and concerns through communications with the IND sponsor. FDA
does not traditionally send application reviews in response to an
inactivation request but does acknowledge the inactivation. Please note
that we do post our reviews of New Drug Applications once the drug is
approved for marketing.
I hope that this answers your questions. If you'd like to know more
about the status of this particular product, you are best off asking the
company that you've invested in.
Regards,
Virginia L. Behr
Ombudsman
FDA/Center for Drug Evaluation and Research
What I meant is that the in the 6' box, there was enough problematic, unresolvable data that their FDA consultants let them know that the IND was doomed. What they want to hide is that they knew ahead of time that the FDA was going to kill it, and the illusion they are trying to perpetuate is that the IND submission was done in good faith. They are also trying to make it impossible to draw any conclusions at all about why CX-717 was shot down.
I think it is delusional to expect transparency from any company. Stoll's mandate is to keep COR afloat, not to be an eagle scout. Stoll has an interest in maintaining his credibility, but if the stakes are high enough, I have no doubt that he will be misleading/evasive/dishonest.
Let's be clear: under the circumstances, I don't think they had good options. I don't think the issues raised about CX-717 were legitimate -- this whole debacle came into being because of the FDA's demand of studies at 70X the clinical dose, which would have blocked phIIb for aspirin.
So for me personally, I no longer pay much attention to what Stoll or anyone else at COR says. I do think their platform has great potential. I also take comfort in the insider buying.
>>Why were they (Cortex) talking like they were expecting a formal letter if it's not FDA policy to send one?
To obscure the fact that CX-717 had real problems. I think that is why they inactivated the IND, to preclude the letter. There is no way that they don't understand the implications of what they're doing. They have a small army of FDA consultants helping them. If we know that no letter is forthcoming, they know it too. It is this lack of candor that strongly suggests to me that they had something to hide.
He won't be getting a letter. I contacted the ombudsman at FDA, and they told me that because of COR's decision to inactivate the application in response to the conversation between FDA and cor, the FDA was no longer required to submit anything in writing.
JD I'd love it if you said more, because I can't figure out what you're saying. You write "It broke the 50 day MA in July/Aug.." What "it"? and then "next was the break of the 200 day MA with the secondary". What is the secondary? I'd be very grateful if you'd fill me in, because if these indicators do provide early warning, it would be extremely useful to know about.
TIA nmm