Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Opiates depress breathing across the vertebrate lineage (from frogs to humans). Opiates have their effect by decreasing neuronal excitability (It's believed via opening of Cl- channels). Ampakines upmodulate AMPA receptors, which are the most ubiquitous and generic receptors mediating fast excitatory transmission in the CNS in both vertebrates and invertebrates. The preBotC is the functionally defined network in ventrolateral medulla that plays a critical role in rhythm generation, and its activity is depressed by opiates. Evidence suggests that this structure plays the same role in humans.
Importantly, insofar as ampakines restore respiratory rhythm following opiate-induced depression (as has been demonstrated in rodents), they do so by a generic pathway, by increasing the efficacy of excitatory drive. This stands in contrast to the earlier study carried out in Germany, in which a subtype of serotonergic receptors was upmodulated. The generic nature of ampakine's effect is important, because insofar as one targets a highly specific receptor subtype, it becomes more likely that species differences come into play.
The takehome is: everything suggests that opiates depress breathing in humans and rats by the same mechanism, and by affecting homologous structures (this is the somewhat surprising part). In rats, respiratory rhythm is rescued from opiate induced depression by ampakines, which upregulate excitatory transmission in a generic way. It seems reasonable that this will be replicated in humans because the generic effect of ampakines is most likely to be consistent across species, since the effect is on a ubiquitous receptor that is highly conserved.
Aside from the dead-cat bounce that freto called, I don't think TA is particularly applicable to this stock. This stock is going up on good news (RD, PET, joint ventures,...). Even if and when good news comes, at each step of the way the stock will be dragged down by people who have been developing ulcers waiting for a sell price they could live with and exercise of all the warrants. All of this will play out as a race against time, since by August, funds will need to be raised, in the best case via a partnership, in the worst case by a death-spiral dilutive financing.
People buying now are likely to make some nice money. Anybody who bought above $1.50 is going to be very lucky to get back to zero.
I don't even trust the science much anymore, because I don't expect management to be forthright about their findings. I'm not even sure I begrudge them the bill of goods I feel that they sold me. What were they supposed to do, get up and say "sorry everybody CX-717 has real problems"? If they had done that they would have had a harder time with the July financing, and by now they'd likely be toast. I think that when Stoll gave us the good news in Feb, he believed it. I think that in the months that followed, he got more information, and realized that he was playing a bad hand, and he played it as well as he could. I hope he's been dealt better cards now, because this time around, nobody's going to believe his optimistic comments.
Why is futile paranoia more productive than futile upside speculation? We're all sitting in a hole together waiting for whatever we're waiting for. There's not a damn thing we can do but wait or cut our losses and leave.
What I don't get is why Stoll, during the CC more or less said "we still haven't received anything in writing..", instead of "we're not going to receive anything in writing".
If all this were above-board, as Neuro believes, why didn't Stoll say it like it was? Did he not know that by inactivating the IND he was precluding a written explanation? I'm convinced he fully understood the implications of inactivation, particularly wrt the removal of the FDA's required written response.
Another problem I have is that the IND process, according the the flow-chart at the FDA's website, is supposed to be interactive, with the FDA raising concerns, and the company coming back with alternatives/explanations/etc. Cor made a substantial investment of time, resources, and manpower to prepare CX-717 for its IND submission. It just doesn't make sense to me that they'd just flop if the compound was as clean as we were led to believe in earlier CCs. What one would have expected is at least some back-and-forth between the FDA and COR in an effort to work out some kind of compromise. This is particularly the case because COR's management had to have known that a negative ruling would crater the SP.
My conclusion is that COR's 6' box contained data that COR had every reason to believe would lead to another hold. By caving, they kept alive the alternative explanation that the FDA was just operating in CYA mode. This is the only explanation that renders Stoll's intention of going forward with CX-701 for ADHD at least half-way comprehensible: if the FDA's ruling was merely based on ADHD as the wrong indication for a new compound (young healthy patients; other meds; non-life-threatening;...), then why would Stoll plan on submitting another new compound for the same radioactive indication?
COR likely isn't going to get anything in writing. Here's what the ombudsman wrote:
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
This whole thing stinks. Stoll's flop in response to the FDA's phonecall can be understood as an easy way to completely bury any problems with CX-717 that might not have been consistent with the upbeat comments made by Stoll leading up to the IND.
In a paranoid vein, I've been thinking that the ADHD fiasco could have been engineered to take the company private via a buyout.
Write the ombudsman too. He may ignore both of us, but the more letters he gets, the more likely he is to look into it, and provide us with better information about what is going on.
Here's the letter that I've just sent to the FDA's ombudsman:
Dear Ombudsman,
I am an investor in Cortex Pharmaceuticals. This company filed an IND to the division of Psychiatry for phase IIb trials of CX-717 in the treatment of ADHD on September 11, 2007. On October 11 2007, the company issued a press release stating that the IND had been rejected, and that the company opted to have the drug put on inactive status.
To date (60 days post-submission) the FDA has still not issued a written review of the IND submission. Are there guidelines in place that require a written review, particularly in the case of an IND's rejection? Does Cortex Pharmaceutical's decision to place the drug on inactive status change the requirements for the FDA?
I would be grateful for any clarification regarding this matter, particularly because the outright rejection of an IND (as opposed to a hold) is not included in the FDA's IND flow-chart.
Yours
If I get a response, I'll post it.
Thanks for the information. I'm going to call the FDA tomorrow to clarify what the regulations are.
Neuro
Is it conceivable that the FDA will never provide a written explanation for its negative response to the ADHD IND? Is this permissible?
If a written response is necessary, can this delay simply be ascribed to neglect/incompetence? Has this happened before?
I doubt that a former employee would risk a direct rip-off of their former employer's IP. Aside from the poor prospects in a patent dispute, an individual who did this would likely face a civil or criminal suit.
I think of my experience with cor within the Kubler-Ross model of the 5 stages of bereavment (denial; anger; bargaining; depression; acceptance). The problem is, this thing doesn't die, so I've tended to oscillate between bargaining and depression.
Objectively, I think cor is a pretty good bet now, because the binary event is based on an experimental outcome, and what I know is relevant to the event in question, and tells me that the study will be sucessful. In the longer term, I have less faith in management (see the distorting effects of stock options), and no faith at all in the FDA. I'd be very surprised if this stock didn't appreciate 100% from current levels by april. I can't buy because I need the tax write-off, and I'm stuck with a 30-day hiatus.
Re: stock options (exerpted from a piece by Surowiecki in the NYer)
"Options, which give executives the opportunity to buy company stock at a predetermined "strike price" within a certain period, seem like an ideal tool for insuring that a C.E.O. cares as much about the company's stock price as his shareholders do. The problem is that if a company's stock price is below the options' strike price when they expire, those options become valueless -- and they're just as valueless whether the stock price is a dollar below the strike price or fifteen dollars below it.... As a result, that C.E.O. is likely to embrace projects that promise big rewards, even if they also entail a significant chance of failure.
Not surprisingly, a recent study of almost a thousand companies by the management professors W. Gerard Sanders and Donald Hambrick found that C.E.O.s whose compensation was made up mostly of stock options tended to "swing for the fences," making investments and acquisitions that were riskier than those made by other executives. As a result, the performance of those companies was far more volatile, and not for the good of the companies: the risky strategies were more likely to end in big failures than a big gain. Generous options grants may also encourage fraud; the business professors Jared Harris and Philip Bromley, who have made a study of hundreds of firms forced to restate earnings after accounting irregularities, found that companies that paid out most of their compensation in stock options were far more likely to end up restating earnings."
The lack of a letter may indicate that this thing isn't as dead as we think it is. There is just no way that the FDA can shut down a promising compound whose efficacy has been shown, and whose safety profile has been exhaustively tested without a written explanation of why they decided to kill it. The FOIA was set up precisely for cases like this, and the notion that we should worry about the FDA getting pissed-off is laughable. It's not COR that is demanding a letter it is shareholders. Why should the FDA take it out on COR?
The April binary event is different than the October binary event, because the former is based on science, and the latter on who-knows-what.
From a scientific standpoint, data from rodents is very likely to generalize to humans, because: there is good evidence that the preBotC, identified as the rhythm generator in rodents, is preserved in humans (an abstract by Schwarzacher at the recent SFN); because the mu-opiate receptor in humans has the same pharmacological profile as in rodents; because ampakines generically upregulate ampaergic excitatory drive.
I'd be interested in the opinion of others who are familiar with the pharmacology, but from a scientific standpoint, I rate the likelihood of a negative outcome as low: based on the above, if it works in rats it should work in humans.
There are two metrics for success in this trial: the ability of ampakines to rescue breathing, and the ability of ampakines to preserve analgesia. If depressed breathing is rescued at the cost of a partial loss of analgesia, the drug still is useful. It is just not clear to me if both of these variables will be monitored independently of one another.
The RD indication looks good. I saw the data, and the effect is straight-forward enough. While it is always useful to remember species differences, in this case it would be surprising if what worked in rats failed in humans, because of the tightly matching effects of opioids in both species, because blood-gas homeostasis regulating medullary networks are thought to be highly conserved, and because the effect of ampakines in RD is plausibly a first-order effect.
We'll have to wait until April. Between now and then, I foresee that we will be well below 0.5, maybe hitting R&R's projected value. This may not be a coincidence: unlike the typical penny-stock manipulation scams, this stock actually has value, so tanking SP may be a means to a buyout or takeover on really lousy terms. I feel like the kinds of analysis that occupy most of the bandwidth on this board are largely irrelevant now. It feels to me like worms eating a corpse.
The gist of your argument is that it's late in the game to try for AD. Notice that this argument gets stronger the longer cor waits. My conclusion is that they need to aggressively pursue AD, so as to make up for lost time.
Paliative care would be great. I very much doubt that any "disease altering" drugs will be very effective for those who are already symptomatic. Getting even a small portion of this enormous market would make financial sense for a cash-rich, product-poor company.
freto
put asuhowe on ignore.
If prospective partners are intersted, surely they recognize that partnering prior to an IND will increase the likelihood of approval? If there were interested partners, at this point it would be in everybody's interest to forge a partnership sooner rather than later. Stoll was beyond coy on this point: my impression is that there's nothing in the offing. If there were, don't you think he might have thrown us the shadow of a bone?
I don't think you're right. We have plenty of examples of leaders who make a virtue of persistence even though it leads to ruin.
As to the question "why do you hold the stock?": Because of the promise of the science.
"you also don't want to singlemindedly pursue an indication that could become moot. "
Nobody's recommending single-mindedly pursuing the low-impacts for AD. It is highly unlikely to be "disease modfying", but if it has palliative effects, it is already head and shoulders above everything else out there. How can you pass this up?
If there is a single-minded commitment to an indication, it is ADHD, not AD.
Why not start a trial to treat respiratory disfunction in
Rett's syndrome using low impacts? They have very nice preclinical data on this using a pretty good animal model, and there is virtually nothing else out there for these kids. Also, there is no "disease-modifying" anything with these kids: they have massive problems with their CNS, so it would be nice if something were done to ameliorate the one symptom that may be amenable to treatment. Approval of an IND (submitted to Neurology, likely) for an orphan indication would likely be easier to obtain than any kind of ADHD approval.
I'm not saying this is guarranteed, it's just that this kind of proposal merits consideration. Why isn't anything like this explicitly being put forward? The company desperately needs to establish ampakine safety, and this might be a route.
I disagree. Cor has a number of options. The ones Stoll is emphasizing are problematic. Do you really feel like ADHD is the best choice going forward for cor? Do you think it is the only choice?
We need to know whether or not there were lingering problems with CX-717. If cor was able to establish that the signal that led to the hold was a post-mortem artifact, then ADHD appears to me to be a lousy indication, since axeing a phIIb trial based on a post mortem fixation artifact induced by a 70X clinical dose is arrant nonsense, and has to be seen as a reflection of current political/regulatory realities.
If there were real problems with the histology, then it makes sense to go forward with ADHD using other compounds. The problem is, shareholders were told that the artifact was accounted for, and the CX-717 was clean.
So pick your poison: either cor's management is oblivious to a fairly obvious political reality (i.e., the FDA is going to be hyper-cautious with any drug for ADHD, particularly a new class of compounds); or cor has been less than candid with shareholders about what really happened with CX-717.
I don't know which is worse.
Do you feel that the prospects for this company might improve under new leadership? Stoll has been dealt a bad hand, but he is also playing it badly. Isn't there a chance that the BOD steps in when a CC leads to a collapse in SP, on very little bad news?
Up until now, I felt that the call for new leadership at cor was the wrong emphasis. When Stoll rolled out the idea of continuing with ADHD, and deemphasized orphan indications and AD, I began to get cold feet. When he talked about cor's brilliant future, and all the great drugs in the pipeline, I didn't get the feeling that his leadership is reality based. Where's the money going to come from? How can cor increase SP and restore investor confidence? These are pretty basic questions and goals, and I don't feel like he answered them. He wants us to get enthusiastic about the new compounds the way we did about the old compounds, but I at least feel much more cautious about anything Stoll says.
>> " I didn't say that..." See 11460. Here's what you wrote, and it made sense:
I think the issue with Psychiatry reflects an interaction between the lingering uncertainty about CX717 and the disorder under discussion. Psychiatry knows ADHD is 'real', but it also involves eventually a heavily pediatric population, and psychostimulants are very effective. Dew and I probably disagree about the salience of the problems involved (side effects and abuse) but one thing I do know--a lot of parents won't put their kids on stimulants, leaving them with near-placebo Strattera, less-effective off-label Provigil, or nothing. But that's not the FDA's concern--they will say that very effective therapy is already available, there's no reason to take a chance.
Neuro
What do you think of Stoll's strategy of continuing to pursue ADHD? Does that strike you as sensible? Why not any other indication, such as palliative care for mild AZ using the low impacts? It seems to me that there was something of a consensus that the FDA's decision, as much as anything else, was because ADHD is a non-life-threatening indication that primarily affects otherwise healthy individuals, and they didn't want to run the risk of introducing a new class of compounds for such an indication, particularly because there are existing, albeit crappy, treatment options. Insofar as this is true, why try again with a new compound, and risk further tainting ampakines as a class? I just don't get it. This looks like a bad move to me.
Also, why the resistance to pursuing AZ more agressively?
I don't think the SP dropped because of what Stoll said, but rather what he didn't say. People were looking for partnership / buyout news.
Neuro, do you think his timelines are realistic? How dire are things? Does it make sense at this juncture to get excited about compounds that will generate revenue after current funds have run out? Was there anything in what he said that offered hope of an upturn in SP?
Do you still have confidence in Stoll?
"all of the things acting positively..." Look at the SP! This guy is like Captain Sparrow in the opening frames of the Pirates movie.
I see no sign of any rethinking of anything.
His lack of candor about CX-717 troubles me. In the spring, he was pretty unequivocal about the drug being clean. If he can't stand by that, then it suggests that he wasn't straight about the tox data. He doesn't seem to need any details from the FDA to understand the rejection!
His comments about propofol were nonsensical. Why can't he just say "ampakines in the context of propofol-induced RD is not a very useful avenue"? That's like a minimum sign of lucidity!
The corn-chip crowd has moved on. Let's hope that ampakines are an antidote to flop-sweat.
It's not self-serving. I've lost my shirt on this along with everybody else. Obviously, if the FDA had given the go-ahead, we'd all be rich, but if pigs had wings they'd fly. The point is that insofar as cor's management has to adjust, they need to shift to a lower reward, lower risk strategy, since at this point the survival of the company is very much in doubt.
Big Pharma can absorb a negative FDA decision. Cor can't. That has to put some constraints on cor's future strategies.
What might have been tactically smarter was to establish a joint venture with a BP (on less than ideal terms) PRIOR to the IND submission. This would perhaps have obviated the need for the last SP dilution, and might have provided cover with the FDA.
For the record, when I mentioned this in July, it was either ignored or judged a very bad idea.
I don't think Freto et al realize how many longs there are that are looking for an exit point. I don't think they're going to make much on cor either. Insofar as freto and the TA/day traders give the dead cat some amphetamines, I think it will just make for a steeper correction when they tire of the stock.
This debate raises the policy question of how the FDA should handle post-approval epidemiological data that indicates problems missed in clinical trials, presumably because of small sample sizes. It's not clear to me that it necessarily requires that the FDA to "hunker down", since there really isn't any way to fully screen a drug's safety in clinical trials.
I think that tighter post-approval oversight would be a positive development, because it would put less burden on the clinical trial phase to root out any and all problems with a new drug. A "probation" category, with appropriate legal disclaimers, might be a better way to compromise between the need to protect the public and to foster innovation.
I want to know about how penny stock day-traders see COR, because for the next while, they are likely going to constitute a sizeable portion of COR shareholders. Understanding the basis for their trades could be extremely useful, especially because of how their trades could now affect this volatile stock.
It's the venting, invective, and self-aggrandizement that is tiresome. I wish people could discuss the science, the regulatory environment, the market, or management, and leave the rest for elsewhere.
I don't think this is over. Eventually Psychiatry will have to submit some kind of written justification, and everything tells me that the justification will be bootless. Sooner or later a process this flawed has to be challenged, and what has happened here is unprecedented, inconsistent, and without justification.
Should this just be allowed to stand?
The circumstances surrounding this event are even more unusual than your review indicates: Hard-ass Katz in Neurology, who had originally raised flags about CX-717 gave it a green light for the PET scan study; a devastating rejection is phoned in, but no written justification for the decision has been provided.
I know that the PET study is a one-shot deal, but it doesn't make sense to me that Katz would have approved the drug, even for one-shot use, if he shared the misgivings that caused Psychiatry to reject the application.
Basically, two branches of the FDA have reached opposite conclusions about a molecule, and the one that has rejected the molecule for the chosen indication has given no reason for that decision, after having had 30 days to review COR's data, and 2 weeks to bang out a letter.
As far as I'm concerned, this suggests a more fundamental institutional failure than has been recognized.
Neuro,
Is this part of the FDA's mandate? Is it their job to decide what classes of drugs warrant exploration?
My sense was that their mandate was to consider the safety and efficacy of compounds. What you're ascribing to them is a policy role that goes well beyond this. If CX-717 addressed the safety concerns raised in the early round of tests, then I for the life of me don't see how the FDA could have ruled against them without violating their charter.
I'm probably being simple-minded here, but this isn't remotely right. It's like a creationist reviewing scientific manuscripts on evolution.
I looked at the paper, and its data rather unambiguously show that CX-717 doesn't do much for sleep deprivation.
The good news is, nobody had seizures, developed boils or became psychotic.
In the CC, I hope someone raises the issue of why COR acquiesced to the FDA's ruling, when everything indicates that the FDA didn't even consider the data. If it is really the case that the decision was made before the data were seen, then somebody should put up a fight. People have been ruined, and a promising compound has been effectively killed. This is only getting worse because of the FDA's failure to provide anything in writing explaining the decision.
Could a FOIA request get us a transcript of the FDA's decision?
The flip side to this is that maybe COR rolled over because it knew about problems with the compound. For me this would be even worse.
Even if the FDA had an a priori objection to CX-717 for ADHD, they could have allowed the pIIb study to proceed while communicating with cor and its BP partners what benchmarks needed to be met in order to bring the drug to market. They could have set the benchmarks high, but in the absence of a scientific justification for killing the compound, what they did goes beyond the mandate of the FDA.
You're assuming positive RD results. When / how are they going to raise more operating funds? Looking at the broader market, I think that it's going to get a lot harder to secure loans for any venture, especially for a company that issues warrants that can't be redeemed.
I'm not at all sure it's possible, because I don't know why a BP would bother (they can just sit back and wait), but my feeling is that cor has to enter into a partnership sooner rather than later. They need to do this to be able to stay afloat, and also because if they ever wish to issue warrants again, they have to maintain a track record of being able to provide lenders a minimum return on their investment. By mid-feb, the warrants issued this summer can start being sold at a floor of ~$2.60.
The larger problem is that if longs are being replaced by short-term, speculative investors, then every time there is any kind of rally, they will dump their shares.
Until people buy for the long haul based on the science, this is a crappy penny stock.
It's unbelievable what a mess has been made of this remarkable IP.
nakedmouse. It wasn't a rhetorical question. I'm pretty convinced you have to be nuts to buy this stock, and I'm looking for a not-nuts explanation for this, having to do with strategies that may be important for me to be aware of.