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Jazz, I agree with your “wondering”
“Peregrine's thrust right now obviously is therapeutic, which is why recently I've been wondering if the Gates/Duke work will be something seperate from King's recent mention of the upcoming bavituximab HIV/HCV clinical trial.”
That’s exactly the message I picked up and included in my post on Nov 21, which said:
“HIV: Lots of meetings and excitement from third parties at AASLD about Bavi’s potential for treating HIV-HCV co-infected patients. Apparently there is a huge, unmet medical need in this patient population since co-infected patients often end up not being able to receive either HCV SOC or HIV SOC. In my IBG, the Company will start its own Bavi Ph I trial in co-infected patients (without a large institutional collaborator like Duke) sometime in the next month or two using docs who got excited about Bavi at AASLD. Duke / Gates are running in their own direction to develop Bavi as an HIV vaccine and that work is going just fine.”
Three Thoughts and a Tidbit:
Registered stock is an attractive way to do a BP partnership. It saves the parties from having to negotiate a separate Registration Rights Agreement. Having a shelf registration in effect allows the Company to raise some cash in the market in April or May if the PPS pops after clinical data is released this spring. It also positions them to do a large BP collaboration at any time.
I was disappointed not to hear today some results from the 1 mg and 3 mg repeat dose HCV cohorts that have finished the 12 week wait. To rationalize the additional month of waiting we now face, I am wondering if the Company wants to wait for the 6 mg cohort to preserve dosing confidentiality. By averaging the results of the top three cohorts they can avoid revealing where the dosing sweet spot is found. Just a wild guess.
Here’s another guess based on better info. I’ll bet SK’s oblique remark today about being able to self-fund some of the Phase II/III trials was a reference to the Cotara GBM trial which is the one product the Company may keep in-house. I still believe the Ph II cancer trials starting next summer will be done through BP alliances finalized after the spring data dump.
Here’s a tidbit I forgot to report on Nov 21:
Q: When are you going to give Bavi its two tradenames for the AC and AV markets?
A: Pharmaceutical companies tend to want to be involved in naming their products.
Nice work CJ.
Of course the other way to have gotten this info would have been from my post on Nov. 21 which stated:
“Interferon by itself as a monotherapy achieves only a 1.0-1.5 log reduction in viral load. When combined with Ribavirin this increases to 2.0 log reduction. Given that Bavi has no toxicity, if the repeat dose data comes in next month showing a reduction anywhere from 1.0-2.0 logs for Bavi as a monotherapy, Bavi will have earned a secure place in the pantheon of new HCV therapies.“
If I were posting merely a guess or my opinion, I would have said so.
Maybe you can also find independent confirmation that the load reduction increases to 2.0 log when Ribavirin is added to Interferon. In my IBG, Bavi will do quite well when Ribavirin is added to Bavi !!
As you and Jazz have explained so well, the Company is setting the stage for the public to understand that Bavi is about to become the immunotherapy of choice used in combination with various anti-viral therapies BECAUSE:
1. Bavi has no toxicity, Interferon has lots; and
2. Bavi’s MOA is so far upstream that it promotes dendritic cell activity and a lasting innate immune response. Interferon’s MOA doesn’t have the same advantage.
As SK said at the 10-24-06 SHM, Bavi could become “… a MAINSTREAM PRODUCT for combination therapy. And it should be noted that most chronic viral infections, as well as many acute viral infections, are treated as part of a combination therapy.”
My question is not “if” Bavi will become the SOC for background immunotherapy. Instead, I would like to know how big is the global interferon market that Bavi will replace. Can you get any info on that?
Thanks in advance. BOT
I understand that:
IBG = Informed Best Guess
CANCER:
Although it may be Feb. before dosing is complete for the 12 combo patients in India, MRI studies will be done frequently to measure tumor response throughout the 8 week treatment program, not just 4 weeks after dosing completes. This is important because it will allow PPHM to start selecting, as early as January, which of the three tumor types -- breast, lung or pancreatic -- should be the focus of the first Ph II trial.
As SK said in the Sept. CC, the Company is preparing to “move directly” into larger Ph II/III type trials once the Indian combo trial is complete. The reason why tumor response, i.e. efficacy, was not included as a formal endpoint of the 12 patient India combo study was to allow Ph II to get started faster. You can’t start Ph II in US or India until all of the Ib endpoints have been fully evaluated.
The next major strategic decision the Company faces is to select the cancer type, i.e. breast, lung or pancreatic, for its initial Ph II trial. The FDA will not allow Ph II to be done as an all-comers trial.
In my IBG, shortly after January MRI scans start revealing which tumor type is most responsive to Bavi plus chemo, negotiations with a BP collaborator will be finalized. My IBG is that the Company is already discussing collaboration terms with the BPs behind docetaxel, gemcitabine and carboplatin/paclitaxel.
The cost of Ph II/III trials similar to those done for Avastin (whose development path we are imitating) is enormous. Such a trial could have as many as 5-10 arms and each arm could have 100-200 patients. In India the cost of each patient will be around $15K-20K and twice that amount in the US. Thus an Indian arm with 150 patients will cost around $3M and the same study arm done in the US will cost around $6 million. The good news is that the FDA will count the patients done in an Indian arm just as if they were done in the US. So if the total Ph II/III has eight arms and five are done in India and three in the US, the total cost of this Ph II/III study could be around $33 million (3x$6M plus 5x$3M).
My IBG is that the cost of PPHM’s first Ph II study will be paid for through a collaboration with the BP that has the greatest stake in protecting its chemo market share in the tumor type PPHM decides to go after. Contrary to views I have expressed previously, it now seems the investment banking route will be too expensive (heavy warrant coverage would be required) and third party licensing of Cotara for GBM may not make sense for the reasons discussed below. Clearly a financing in the $40M-$45M range (i.e., $33M for Ph II/III and another $7M-$12M for general working capital needs) is way beyond the reach of UU or any other PIPE player.
In my IBG, based on MRI tumor scans done in Dec and Jan, the Company will finalize a BP collaboration in Feb and file the Ph II/III with the FDA the same month and start dosing patients in April. The BP who is willing to run lock-step with PPHM in achieving this aggressive schedule will win Bavi rights for its primary cancer market at a much lower cost than other BPs will have to pay down the road for licensing rights in their respective cancer markets. It’s also possible PPHM could announce two Ph II/III studies starting roughly the same time, each supported and funded by a separate BP collaboration.
News of this BP horse race could leak out in Jan or Feb in advance of a PR of top line data from the 12 patient Indian combo trial. If several BPs are competing for the same collaboration, there is likely to be an industry buzz in addition to the buzz that may come out of the Indian medical community.
COTARA FOR GBM
PPHM is confident they have a winner here. The latest results show Cotara extending survival time in 3rd and 4th relapse patients by twice as long as Temozolomide in 1st relapse patients!!! If these results are repeated in the current 40 patient Indian trial then PPHM may have an opportunity to market the drug directly without licensing to BP. This is possible because the advantages of Cotara over SOC are so huge that all the brain oncologists (a relatively small group) would switch to Cotara without need for PPHM to develop an expensive marketing program. Temozolomide is a $600M annual global market. The margins on MABs are so great that most of this would go straight to the bottom line.
Personally, I very much like the notion that PPHM may do its own direct marketing of Cotara for GBM. Once collaborations with BP are announced for Bavi Ph II trials and/or it becomes clear Bavi will be a player in the HCV market, it should be easy to raise capital north of $5/sh to pay for completion of Ph II/III Cotara GBM studies in India. Approval of Cotara for GBM in India may not require as many study arms as would be the case in the US. The Indian docs are VERY excited about Cotara. Once it gets approved in India, approval on other continents would follow quickly.
HCV
One of the viable options for administering Bavi is to give it like a booster shot once a month to re-invigorate the immune system.
Interferon by itself as a monotherapy achieves only a 1.0-1.5 log reduction in viral load. When combined with Ribavirin this increases to 2.0 log reduction. Given that Bavi has no toxicity, if the repeat dose data comes in next month showing a reduction anywhere from 1.0-2.0 logs for Bavi as a monotherapy, Bavi will have earned a secure place in the pantheon of new HCV therapies.
Combination trials with Ribavirin are likely to start before a trial focused on naïve patients. Naïve patients are much harder to find and trial would take much longer to enroll.
HIV
Lots of meetings and excitement from third parties at AASLD about Bavi’s potential for treating HIV-HCV co-infected patients. Apparently there is a huge, unmet medical need in this patient population since co-infected patients often end up not being able to receive either HCV SOC or HIV SOC. In my IBG, the Company will start its own Bavi Ph I trial in co-infected patients (without a large institutional collaborator like Duke) sometime in the next month or two using docs who got excited about Bavi at AASLD.
Duke / Gates are running in their own direction to develop Bavi as an HIV vaccine and that work is going just fine. In my IBG there will be a publication out of Duke on this work in Q1.
CMV
In my IBG, CMV clinical trial is also imminent. Demand for CMV therapy in connection with liver transplants is huge. A CMV trial and a co-infected HIV trial are both very close.
Dr. Thorpe’s presentation on Dec. 12 will probably not be webcast but release of new US cancer and HCV clinical data by way of a PR the same week is entirely possible.
All longs should get ready for a feast. The table is set. The side dishes are all coming together and, in my IBG, the turkey itself -- a Ph II collaboration with BP for breast, lung or pancreatic -- is almost on the table.
Let’s be Thankful.
Thanks for the great post Jazz.
Along the same lines, I've been thinking conjugates like you describe could be the key to solving the HIV pricing problem. Bill Gates could subsidize the cost of a really inexpensive Bavi/HIV antiviral conjugate sent all around the world. The HCV conjugate could be priced just below the competition for the HCV market, and still different pricing could be used for Bavi/chemo conjugates in the cancer market. All IMHO.
Great Post Brandon.
I concur with everything you say, especially the hierarchy of importance you describe. Thanks, B.C., for all your time and effort in reporting the s/h meeting so well.
The only thing you left out is Cotara. I think management is very excited by Slide 8 in P.L.’s presentation. PPHM knows they have found the dosing sweet spot (2.0-2.5 mCi) and they realize they may only be 20 patients away (perhaps 4-6 months away at Indian clinical speed) from having enough data to do a fairly-priced BP license of TNT for the GBM market. That license will give us the cash and credibility needed to light a bonfire under all the AC and AV Bavi programs.
_______________________
Separately, I believe a new card is at play that wasn’t in the game before. For the first time management is pursuing PR aggressively because the next funding for the Ph II trials will be in the $30-$40 million range and the dilution stakes will be high. Contrary to some on this board, I believe management views unnecessary dilution as a serious problem. They know the clock is ticking fast since the next financing will have to be priced somewhere between March and June. If they can’t close a Cotara license by March or April, they will distribute as much top-line data as they can on the HCV repeat dose trial and the Indian cancer combo trial as soon as enrollment completes in those trials. That means “late 2006 or early 2007,” i.e. Dec or Jan.
For the last two years management did everything they could NOT TO BEAT the PR drums before they had to. Over the next six months, the opposite will be true -- they will do everything they can to TO BEAT the PR drums at the earliest possible moment. They want that WSJ article to appear in Feb or March just as much as we do.
"So, when do long shareholders get to know why PPHM is so excited?"
Progressively over the next three months.
IMO, PPHM will go for the longer term, higher valuation. Both the HCV Ph II and the cancer Ph II could be largely completed by end of calendar 2007. That's not too long to wait for a tripling of what BP will pay.
India combo trial is a huge value driver.
Sunstar, I agree. My understanding is that the BPs who produce each of the three SOC chemo drugs are already asking for more dialogue with us.
Imagine the leverage SK will have in license negotiations if Bavi enhances all three chemo drugs. No BP can afford to let another BP get an exclusive that covers their own tumor indications. All of them will have to pay PPHM top dollar just to stay in the cancer game and not get taken out by the competition. As more Phase II data rolls in, the BP bidding war will get very fierce.
THERE’S NO WAY WE’LL SEE ANOTHER PIPE. The two most likely scenarios for raising cash in April/May to fund the Bavi Phase II trials are:
Scenario I. Cotara for brain cancer is licensed off. Why do you think SK went into the $600 million market value of GBM and the speed at which India can enroll 40 patients? We only have to treat 20 of the 40 patients to be in a position to license Cotara for GBM at a fair price that could fund all of the Bavi Phase II cancer and Phase II HCV trials and still leave plenty of free cash after that. We’re not going to get much more by waiting to complete the Cotara trial than we will by cutting a deal in Feb or March when the trial is one-third or one-half complete. But the leverage we would gain from being able to fund Phase II Cancer and HCV trials without further dilution is staggering.
Scenario II. The 1B data for HCV repeat dose and India combo patients will all be on the table by Jan. or Feb. At that time the Bavi story is not only ready to be told by major media, it’s also ready to be bought and resold by major investment banks. Before the IB data was on the table, a PIPE without commissions made more sense than a secondary offering by a major house. With efficacy data from 12 cancer combo patients and 24 HCV repeat dose patients, investment banks will trip over themselves to give us $40 million at $2.50/share for private placement shares they pump and resell at $5.00 six months later in a secondary offering.
Investment banks have analysts who can see clearly the intense bidding war that will emerge among the BPs for control of the different slices of the Bavi cancer market. There are huge investment banking fees to be made as this stock moves from $2 to $20. If the India trial goes well, there will be plenty of time in Feb, Mar. Apr. to close the right investment bank deal on the right terms.
If either the HCV or the India Ph 1B data comes in strong, or if the first 20 GBM patients go well, the days of the PIPE are over and our short friends will be hung out to dry.
Aren’t you really asking a different question?
Quantum, the underlying issue in your post is not really about being too small to have “recourse.” If Mgmt has misled investors regarding Bavi’s safety profile, this RB Board gives me plenty of recourse to hook up with other like investors to bring suit and share the costs, not to mention the institutional investors who would lead the charge. Shareholder litigation is rampant these days and more so because of chat boards like this one.
The real question underneath your post is not investor recourse, but the fear that perhaps management lacks integrity and accountability. What if SK doesn’t care about the accuracy of his PR and CC remarks? What if his professional reputation in the industry doesn’t mean anything to him and he just makes stuff up as he goes along? What if all the world-class docs who’ve joined the SAB have misjudged PPHM management?
My own assessment of these questions from years of close contact is that PPHM’s current management is an extremely conservative crowd. In fact they are so conservative and so gun shy that over and over they under-state and under-tell our story to the detriment of our pps.
So for me, when SK finally feels ready to make statements like: “We are VERY happy with the safety results,” that statement is all I need to hear on the APTT safety issue. Or when he says “we are INCREASINGLY ENTHUSIASTIC” about Bavi clinical results, that’s all I need to know the clinical trials are going well. I happen to know the Company lawyers scrub down every verb and adjective in statements like this before they go out. However, I understand why others with less contact might not give these statements the same weight I do.
If you want to get inside the heads of this management team, read the book “Built to Last.” It’s what these guys are all about. They know what they’re sitting on and they’re going to protect it by making sure all of their public remarks are very defensible.
I wouldn’t waste a conversation on something so clear.
Lots of people don’t seem to understand the difference between a forward looking statement that carries no legal liability (e.g. something like: “We anticipate progress in a number of areas including generation of compelling repeat-dose and combo-therapy data”) and a present tense statement of fact for which management will be liable if it can’t point to clear clinical data to support its statement (e.g. “As Bavi advances in AV and AC clinical studies, we are increasingly enthusiastic about the clinical potential of its unique mechanism.”)
Regarding the APTT issue, CJ’s post 9081 hit it on the head. In the last CC, SK made several clear present tense statements of fact on which you can sue if it turns out there is a safety problem related to APTT:
“We are very happy with the safety results we’ve seen so far. ... Showing the safety of the drug WAS a critical milestone.”
Those who are still nervous about APTT as a safety issue need to take a level one intro course in biotech litigation.
Regarding the last CC and Katie’s remarks,
It is true that SK’s remarks on Sept 11 created some room for uncertainty as to why the Company could not confirm the start of additional AV trials before year end as previously announced.
However, far more important is that, in a PR four days later, SK came out loud and strong on the really big issue, namely, how well is Bavi doing in the clinic. In the Sept 15 PR he stated:
“As Bavi advances in AV and AC clinical studies, we are INCREASINGLY ENTHUSIASTIC about the clinical potential of its unique mechanism.”
There is only one way a judge would read this statement. SK is saying:
THE AC AND AV CLINICAL TRIALS ARE GOING WELL AND WE ARE ENTHUSIASTIC ABOUT THE RESULTS WE ARE SEEING.
Anyone who gets the “nevous Nellies” (or should I say “nervous Katies”) after reading this SK remark in print doesn’t understand the legal liabilities created by such a statement. “We are increasingly enthusiastic” is not a forward looking statement. It is an extraordinarily clear present tense statement that carries full legal liability. On Sept 15 SK boldly stated that the trials are going so well that he is “enthusiastic” about what he is seeing. Do you really think SK is so stupid as to expose himself to massive litigation if this statement were not well supported by strong clinical data?
While the Company has slipped by a month or two in starting AV trials for new indications, far more important is that the Company has:
1. Greatly accelerated its cancer program through Indian clinical trials that will quickly produce the data needed to close BP deals, and
2. Confirmed publicly, and with legal liability, that management is “enthusiastic” about the results they are seeing in both the AV and AC trials.
_________________________
Separately, I love the diplomatic way David King gave public notice today of the Company’s new, kick-ass licensing program:
"We believe that the breadth of this patent's allowed claims make it relevant to many of the researchers pursuing targeted combination therapy approaches based on destroying the essential blood supply of tumors. Sub-licenses to our VTA intellectual property will provide them with freedom to operate in this area, and this new patent should therefore be a valuable addition to our business development initiatives."
Could Bavi-Interferon tests be reason for Duke delay?
I guess the new Bavi-Interferon fusion protein is being tested at Duke in animal HIV studies right now. Gates wants to be sure of the best way to use our anti-PS platform before he puts his name on it in clinical trials.
Just a guess. All IMO
Separately, I trust everyone understands the difference between "increasingly confident" (what SK could have said to play it safe) and "increasingly enthousiastic." Saying your enthusiasm is growing puts you way further out on the limb than saying your confidence is growing. I suspect today's PR has alot to do with SK's "enthusiasm."
Xzone, You hit the nail on the head:
“I think they are going to india to prove....Yes prove, that Bavi is Kick ass in combo therapy.....
Cutting thru all the red tape, FDA bullshit, and proving to the world and big pharma, that you had better pay attention now....”
This is also how I understand the Company’s strategy. Go hard and fast on Bavi AC combo studies. According to SK in the CC, 12 patient combo trial will complete “approximately around year end or early in the new year.”
The company knows the pps will rock when the combo data comes in because of results already seen at M.D. Anderson in mono therapy trial. Official India combo results may not be announced until spring, but the pps will start moving through the BP and doctor grapevines when the eight week study finishes “around year end or early in the new year.”
By Feb or March, it will be clear that the HCV, HIV, CMV and influenza programs are "just the gravy," as Xzone put it. The smell of the sizzling AC steak will be all through the house.
_________________
The only new thought I would add is to watch Glaxo. They are a big player in India now. Consider the possibility that the reason PPHM was able to pull off this BP-style play in India is because Glaxo walked them through the doors in exchange for the right to be the first to know the Bavi results. What a headstart that would give Glaxo in the BP courtship game for the next mega blockbuster.
Jake, I wish I knew more. My last conversation was in early August.
I said I expected a significant PR before the next CC. I am getting nervous that either I misunderstood the near-term nature of what I heard, or something happened to impact the timeline.
By contrast, I am very comfortable all the Bavi clinical programs are very much “on track”. I don’t know who is doing what to collapse the price, but over the years I’ve seen many, many pps cycles where it was darkest before the dawn.
I tell my wife: “It’s their last chance to induce fear and shake lose some shares.” Do I know for sure that’s what’s happening? NO.
Would I buy more shares down here if I had free cash? YES
Back in late June I heard that M.D. Anderson was “taking the cancer trial to the next level.” In the context I understood that remark to mean enrollment was going faster. I heard nothing to the effect the size of the trial has been enlarged (e.g. to 30-40 patients) or that a higher dose level was added.
Then in the July 14 CC three weeks later SK said:
“Accelerating enrollment trends at some of our centers are encouraging.”
I am quite sure SK was referring to accelerating enrollment at M.D. Anderson.
SK also said in the next breath of the CC:
“We believe Bavituximab has the potential to be a major cancer drug.”
I strongly suspect SK’s belief in Bavi as a “major cancer drug” comes from encouraging reports he has heard out of M.D. Anderson. . Docs at research hospitals enroll patients faster in a particular trial when they see good results coming from that trial.
Seamoss -- Thanks for the terrific article
I have read other discussions of the SEC disclosure rules, but never one like this focused on the biotech industry. Thank you so much.
From my quick reading of the article just now, I would highlight one other statement (found on page 42) where the Court in the Biogen case said:
“absent a misleading prior disclosure, there is no duty to disclose internal business strategy.”
Stuff like overseas clinical trial programs and possible collaborations with Duke or the Gates Foundation or SRI or NIAID clearly fall (at this early stage) in the category of “internal business strategies” that we investors would love to know about but have no legal right to know.
I would make one other global remark about this article. It reveals how much of the biotech game is being played these days in the arena of “forward looking statements.” The article points out how the new “forward looking” disclosure rule, adopted in 1978, has given biotech executives a large “safe harbor” to pump their story between solid clinical announcements. I think it is an excellent sign that PPHM management has not felt the need to engage in this game.
SK believes the solid clinical PRs, albeit spread apart by many months of silence, ought to be exciting enough to sustain the stock price. There are dozens of announcements the Company could have made, e.g. more PRs releasing preclinical Bavi data. I read SK’s decision not to play the monthly PR game as a sign of confidence in the fundamentals of his program.
When you have got the goods, and when you’ve said enough to comply with the SEC’s ground floor disclosure rules, silence is a good thing:
1. It distinguishes you from the crowd of companies begging for attention. A conservative, low-profile PR policy has sex appeal for large investors.
2. It allows friendly, long-term supporters/institutions to acquire a sizeable position at a relatively low entry price.
3. By not shouting “Look at me,” SK postpones the day competitors start developing their own versions of Bavi’s MOA.
Katie, my assumption has been the Company would complete a Ph 1b combo trial with Ribavirin before they decided on the Ph II protocol, although I did not make that clear in my July 22 post.
You may well be right that delays in starting the Ph 1b Bavi + Riba combo study are related to wanting to know more results from the current repeat dose trial. Ideally, one would determine from the current repeat dose trial whether the 1mg/kg or 2 mg/kg dose level produces the best results over a 12 week period before fixing the protocol for the Bavi + Riba combo study.
I have no recent information on this issue but I will speculate as follows: The Company said it would complete "enrollment” in the combo study before year end. If you use the current repeat dose study to determine the correct dose amount, then enrollment in the combo trial should go faster (and still be finished by year end) because they are not doing dose escalation.
Also, it makes sense to have completed the dose escalation analysis before starting the combo trial so that the combo trial can be used to isolate a comparison of (a) 18 patients given repeat doses of combo therapy, e.g. Riba + Bavi at 1 mg/kg per dose with (b) six patients treated during the current trial with repeat doses of mono theraby, e.g. Bavi at 1 mg/kg per dose.
There are lots of data points that seem to confirm the overseas clinical trials, a near-term launch of the HCV combo trial and the Duke/Gates/HIV alliance. Also hear that the cancer trial is going quite well and a top-line progress report may be available long before year end.
Regarding Influenza, however, there are good reasons to believe we will learn the "go/no-go" decision in late Sept. but it is just hope and speculation on my part that we will get a green light.
I agree with your view that most of the shorting comes from hedging by those who are accumulating. Hopefully a series of back-to-back PRs in Sept will convince those funds to cover and raise the bar on the trading range where the next round of accumulation occurs.
All IMO
Katie: I will not be surprised if the next PR is deferred until the week after Labor Day. Consolidating announcements in September (e.g. start of overseas clinical trials, launch of HCV combo trial, confirm of Duke/Gates/HIV alliance, “Go” decision on gov’t sponsored Influenza trials) is a way to create real pressure on the shorts -- maybe even persuade some they are playing in the wrong sand box.
I will, however, be surprised if we don’t see a “significant” PR before the CC on Sept 8 or Sept 11.
All IMO
Significant is in the eyes of the beholder.
Some thought yesterday’s PR was significant, others did not.
I think the Company’s investment of scarce funding and scarce management time to launch multiple clinical programs in multiple continents is very strong evidence of their knowledge they are sitting on a block buster. Overseas clinical trials of Bavi would give the Company a “significant” advantage in three respects:
(1) a big head start in designing US Bavi protocols;
(2) a big boost to the pps through a flood of clinical cancer data many months before that data would emerge in the U.S.; and
(3) much more leverage in negotiating with BP next spring from having treated many more patients. I laid out my thinking on the BP negotiating advantage in a post several weeks ago which is paraphrased below.
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“Most small biotechs would be forced to strike a BP alliance on the eve of starting large and expensive Phase II trials, especially if the drug were limited to the oncology market where US trials are so slow.
“The problem is that you can’t increase your bargaining leverage with BP (i.e. by threatening to do the Ph II yourself) unless you’ve already put an extra $40 million in the bank. Threatening to raise the capital with your favorite banker doesn’t cut it. But once you’ve suffered the dilution and raised the Ph II capital, you’re kind of locked into conducting the Ph II yourself.
“I believe PPHM is laying the groundwork for trials in places like India, Eastern Europe and China because the “cost vs. BP negotiating-benefit” of rapid, inexpensive trials in those regions is very favorable as compared with the “cost vs. BP negotiating-benefit” of comparable trials in the US. From what I’ve heard you could do high-quality Ph 1B or Ph II clinical trials on an additional 120 patients in those three regions (40 in each region) in less than six months and for half the US cost. I’m guessing these foreign clinical trials will start in the fall and finish in the late spring.
“I expect that when PPHM sits down to play cards with BP in June 2007, the hand they play from will include efficacy data from over 200 world-wide Bavi patients.”
Overseas clinical trials
Just a guess! :)
Regarding HCV Phase 1B,
Here’s a repeat of what I’ve learned in conversations:
1. There will be a PR when enrollment is complete.
2. The enrollment completion PR could include some general comments about the overall direction of the Ph IB results.
3. In Ph 1B there is no requirement of a waiting period between the completion of one cohort and the start of another.
4. It is possible that some top-line Ph IB data could be presented on Oct 30 for those cohorts that have completed the 12-week wait.
Here’s a repeat of what I think:
I think there’s a good chance we will see the Ph 1B completion PR just prior to the CC on or about Sept. 11. There are 13.5 weeks from June 6 (when we know enrollment started) to Sept 8. Assuming 2 weeks of dosing per cohort plus an additional 7-9 days between cohorts, all four cohorts could be completed by Sept 8. We know that enrollment is “proceeding well.” Can anyone provide a good clinical reason why they would wait more than one week between cohorts if they don’t have to?
I think there’s an excellent chance we will hear top-line Ph 1B data on Oct 30 for those cohorts that have completed the 12-week wait because, as SK indicated in CC on July 14, the possibility of an adaptive immune response is the most exciting scientific aspect of the Bavi cancer and viral trials. Repeat dosing in animals, as compared with single dosing, produced much stronger evidence of “something that really takes place several days later that … leads to longer-term effects.”
If repeat dosing in humans is also producing much stronger evidence of an adaptive immune response than the Ph 1A single dosing data, I can’t believe PPHM would miss the opportunity to present this evidence at a gathering of the world’s leading HCV scientists even if the 12-week data is available only for the first two cohorts.
I believe Mallette is still very much in the PPHM game.
Consider the possibility that, if Mallette is smart enough to figure out Bavi science, he may have been smart enough, or close enough to the Company, to sell his position in mid June and buy it back in mid August.
Mallette is the type of serious investor that does his homework. In mid June he would have (1) seen the $13M financing coming and (2) had a staffer who alerted him to the cheap warrants expiring Aug 8 that were so clearly disclosed in the 10K.
Buying his position in mid March, selling it in mid June and buying it back in mid August would have yielded a quick $250K profit on 500,000 shares and cut his exposure in half when he got back in, or allowed him to almost double up for the same risk.
Don’t assume that smart, nimble funds like Mallette don’t trade the stock short term at the same time they are big believers in the science long term. Mallete is a value-added player for PPHM. The Company would like him to be pleased with his investment.
Mostly IMO
“More is not necessarily better in repeat dose trials.”
Meddic, I agree. That’s why I’m betting we will hear about Bavi’s adaptive immune response on Oct 30 even if the 12-week wait has been finished only for the 0.3 mg and 1.0 mg cohorts, i.e. the first and second cohorts of the repeat dose study.
There is no waiting period required between cohorts in the current 1b study and we know the first cohort completed infusions in late June. Thus, we can be fairly confident the second cohort of the 1b repeat dose study finished its two-week infusion period by late July, which means the 12-week wait finishes for this second cohort before Oct 30. This second 1b cohort received a total of 4 mg/kg of Bavi in four infusions spread over two weeks at 1 mg per infusion. The big point is not the total dose was 4 mg, but as Meddic points out each patient gets four turbo charges of his immune system, with each charge happening just after all traces of Bavi from the last charge have cleared his system.
SK confirmed on July 14 that they are seeing some evidence of an adaptive immune response in humans after a single turbo charging event/dose:
“You seem to have some initial direct AV activity, and then something that really takes place several days later that hopefully can lead to longer-term effects.”
Well if the “something that really takes place several days later that hopefully can lead to longer-term effects” is already evident after a single turbo charging event/dose, what are the chances this “something” will be magnified when the immune system is hit with four consecutive turbo charging events?
That’s the point Meddic is focusing on. That’s the really big question.
A while back on this Board we had a discussion of whether we needed to see a 2 log, 3 log or 4 log reduction in HCV viral load to be in the game. For me to start popping Champagne, all I need to hear on Oct 30 is that the “something that really takes place several days later” did indeed have “longer-term effects” at the end of 12 weeks.
As Jazz keeps pointing out, we have a blockbuster on our hands if the “longer-term effects” (i.e. an adaptive immune response) is occurring regardless of whether the current 1b protocol produces a log 2, log 3 or log 4 reduction. If adaptive immunity is happening, our novel MOA will have been proven and it will be just a short time to find the right mono-therapy or combo-therapy protocol to achieve a permanent cure of most AV and AC diseases.
Remember, however, SK said only that he was seeing “Something … that HOPEFULLY can lead to longer-term effects.” So what are the odds we will see this “longer-term effect” at the end of 12 weeks following repeat dosing. To answer this question the Company gave us a huge clue in the June 7 PR. Be still for 15 seconds and think about the implications of this June 7 statement:
“Bavituximab also showed signs of durable anti-viral activity after a single dose, with some subjects achieving a greater than 80% (0.7 log) reduction in viral load by day four and maintaining a greater than 60% reduction in serum HCV levels up through the end of the study at week 12.”
Bottom Line: If the above level of “durable anti-viral activity” was achieved with a single immune system turbo charging event, what level of durable activity would result from four consecutive turbo charging events?
We should get more clues at the CC on Sept 11, but for sure we'll know the answer on Oct 30. :) :)
All IMO
Regarding the Gates name,
Jazz, that’s exactly how I heard it -- No explanation or development, but deliberately inserted in context of no PRs at this time.
My understanding of conversation
was that, at AASLD meeting on Oct 30, Company is likely to present repeat dose HCV trial results on those cohorts that have completed the full 12-week follow-up period, even though 12-week data from the highest cohort(s) is not available.
In July 14 CC, SK said: “What is extremely encouraging for me is the fact that so far what we’ve seen in the guinea pig hemorrhagic fever model mirrors extremely well what we’ve seen in patients treated to date. And that is you seem to have some initial direct AV activity, and then something that really takes place several days later that hopefully can lead to longer-term effects.”
This possibility of an adaptive immune response that SK described on July 14 is the most exciting scientific aspect of the Bavi cancer and viral trials. It would mean that Bavi is actually more effective with the passage of time (not less effective like VX950). If SK does indeed have evidence of “something that really takes place several days later that … leads to longer-term effects,” I can’t believe he would miss the opportunity to talk about it at a gathering of the world’s leading HCV scientists.
All IMO.
No delays or upsets.
In a recent conversation I learned:
No delays or upsets have occurred in any of the three clinical trial programs. All pre-clincial programs are on track as well.
A significant PR can be expected in August unrelated to pending HCV trial.
Regarding HCV, the Alamo and Godofsky Centers have plenty of patients for the repeat dose trial and enrollment has gone faster than expected. The Company hopes to make some qualitative remarks about repeat dose results in the PR announcing completion of enrollment, which could happen in the week after Labor Day and just prior to the Sept 11 Conference Call. Quantitative results won’t be available until Oct 30 AASLD meeting. Full 12 week follow-up data for highest dosing cohort probably will not be available by Oct 30.
Regarding HIV, Gates Foundation is working closely with Duke. The Company plans to say more about the Duke alliance in the Sept 11 CC and Oct 24 AGM, but Duke does not want to put out a PR about a project that is still in the pre-clinical stage.
Based on promising pre-clinical data, the Company is still on track to start testing Bavi in 1 or 2 new indications before year end.
That’s all I’ve got. Short conversation!
200 world-wide Bavi patients
KT, I concur. The only thing you leave out is the Company’s aggressive program to generate clinical AC and AV data in India, Eastern Europe and China. IMO, It was no accident that SK mentioned Eastern Europe and China as additional regions in last CC.
Most small biotechs would be forced to strike a BP alliance on the eve of starting large and expensive Phase II trials, especially if the drug were limited to the oncology market where US trials are so slow.
The problem is that you can’t increase your bargaining leverage with BP (i.e. by threatening to do the Ph II yourself) unless you’ve already put an extra $40 million in the bank. Threatening to raise the capital with your favorite banker doesn’t cut it. But once you’ve suffered the dilution and raised the Ph II capital, you’re kind of locked into conducting the Ph II yourself.
My guess is that PPHM is laying the groundwork for trials in places like India, Eastern Europe and China because the “cost vs. BP negotiating-benefit” of rapid, inexpensive trials in those regions is very favorable as compared with the “cost vs. BP negotiating-benefit” of comparable trials in the US. From what I’ve heard you could do high-quality Phase II clinical trials on an additional 120 patients in those three regions (40 in each region) in less than six months and for half the US cost. I’m guessing these foreign clinical trials will start in the fall and finish in the late spring.
So KT I concur with your basic statement. You say:
“What gets communicated by PPHM and how it gets communicated in the period between around Thanksgiving of this year and around Memorial Day of 2007 will let long investors [and BP] know where things stand.”
I agree with your timing. I just add that when PPHM sits down to play cards with BP in June 2007, the hand they play from will include AC and AV efficacy data from over 200 world-wide Bavi patients.
IMO
KT -- Excellent post
Your well-balanced remarks remind me of things I’ve heard in conversations, especially these two statements:
“… but even solo Bavi treatment that gives less than a two log reduction but shows the virus isn't rebounding back-- or whatever results along those lines-- as still sufficing to allow PPHM to proceed with their planned combo treatments.”
and
“Can Bavi do the job by itself against HCV? Nice if it can, but it may not need to in order to be viewed as a blockbuster new antiviral drug.”
Thank you.
A 3 or 4 log reduction seems quite possible, IMO.
This is my personal view but it's based on this SK remark in CC:
"In the hemorrhagic fever area, we did compare single vs. multiple dosing. In those studies, it was a lethal viral model, so they either survive or die from the infection. In single dosing, we saw no increase of survival. Only after multiple doses did we see the increased survival and were able to save 50% from a very lethal infection."
If one can go from no survivors to 50% survivors in hemorrhagic pigs by going from single dosing to multiple dosing with a chimeric 70/30 MAb, then it seems like one could go from 0.8 log (the average 12 week result seen in the HCV PH 1a) to at least a 3 log reduction given that this 70/30 chimeric will work much better in humans than it did in pigs.
Note that they saw the dramatic efficacy improvement in repeat vs. single dosing using a MAb that was only 30% effective in pigs. How much bigger would the effect of repeat vs single dosing have been if they had used a MAb that was 70% effective in pigs?
I invite others who are better at math to comment on my projections.
"Eligible Candidates" for treating co-infection
Katie, It comes as big news to me to hear that VRTX plans to treat HIV with the same compound it is currently testing against HCV.
Has VRTX talked about this in PRs or CCs or on its website? I know PPHM has frequently listed HIV as one of the next indicatations they may go after with Bavi, but I haven't heard of a comparable statement from VRTX.
Can you give us more info? Thanks
JB -- You make a good point.
In fact my comment, "(indeed 40% likely)", was added as an after-thought on my part and was not part of my conversation. I need to use more than a parenthesis ( ) to distinguish my personal thoughts from what I hear. Thanks for the correction.
Here is a personal observation on my part. The important point to take away is that SK's comment during the CC about many exciting possibilities to study HCV/HIV co-infected patients was just the tip of the iceburg. I suspect Duke is doing the preclinical work right now to support a trial of co-infected patients. The fact that an HIV screening test is not required for admission to the repeat dose trial, and therefore a SMALL percent of the patients are likely to be co-infected, is consistent with plans to begin clinical trials of co-infected patients in the near future.
All we know for sure right now is that the Company hopes to make co-infected HCV/HIV patients a major strategic focus of its its anti-viral program and several biotech analysts applaud this approach. That's the take-home point.
Terry, Thanks for the link. Great find.
I have passed it on to be sure the Company is aware.
Separately, the "explosion of knowledge" and "the discovery of many agents with the potential to serve as immunotherapeutic drugs" underscores my comment yesterday on the wisdom of PPHM's minimum disclosure policy during the past two years in order to maximize its First Mover Advantage.
First Mover Advantage
Personal Comment (based in part on conversations):
Here is my take on why our little company has hid its light under a bushel basket for so long. As shareholders we are all frustrated by the lack of flag waving and drum beating. After all, if we own the best platform since antibiotics were invented, why don’t we look and act more like a major league player in our industry?
The answer to this question could lie in the fallacy of assuming our patent position means our early control of the anti-PS medical revolution will go unchallenged. If you have experience in big business, you know that patents are like moats around a castle -- they are helpful in warding off some challengers, but they do not prevent attack from the really big players who are determined to have some of what you’ve got.
So most businesses with a great new idea rely instead, or in addition to patents, on what’s called the First Mover Advantage. They keep the core elements and proof of their market success hidden under a basket for as long as they can. Then they burst on the market with a fury and acquire such a large brand recognition and market share that it’s hard for anyone to catch up with them. Remember the Beanie Baby craze -- a household name overnight achieved by years of pre-launch secrecy. At business school they call this the First Mover Advantage.
In biotech, I understand the First Mover Advantage from inventing a new platform is about 2 years because it will take that long for BP to develop and conduct preclinical and clinical tests on new antibodies that also target PS or related lipids. The sooner PPHM announces to BP and the investment world real proof they are sitting on a blockbuster new platform, the sooner the clock starts ticking on our 2 year head start.
As frustrated as I am by the long wait, I am glad now that the non-human primate data and other evidence that Bavi works has been guarded so tightly. Over the next 2-6 months the basket covering the proof of our story will be lifted and a bonfire, not a small candle, will be revealed. Duke and Tulane will release the long-awaited results of their Bavi primate studies. Ph 1b HCV efficacy results will be announced. NIH alliances to go after respiratory disease will be announced (hopefully). HIV collaborations will be announced. High-speed cancer clinical trial programs in India and possibly Eastern Europe will be announced. And an alliance with a major investment banking firm to fuel this bonfire will also be announced. The race with BP to acquire market share will be on!
As data is revealed over the next six months confirming Bavi’s potential, Gendel will place some articles and the price will go up. Then in 2007 the Company will raise $50-$100 million to launch more clinical trials in the U.S., Europe and India than you can shake a stick at. This is why you can be sure UU’s days are over. The entire size of their fund is around $70 million. Once the basket is lifted and the race with BP is on, our investment bank partners will be raising $100 million for new trials every year. Don’t worry about the pps. If the Company has the clinical data, Wall Street will get the story told.
Thanks to all the PR secrecy we’ve suffered, BP is hopefully still in a “watch and learn” mode about Bavi rather than a “turn on the engines; we can do that better” mode. Once critical primate and human data is disclosed this fall, if the Company can move quickly to launch multiple trials for multiple indications around the globe, we should be able to force BP to negotiate with us rather than crush us.
Bottom Line: By disclosing the absolute bare minimum required by SEC rules, the PPHM Management has demonstrated the business savvy and know-how needed to capitalize on our First Mover Advantage. Having held back so much information for so long, the Company may get lucky and be able to capture for itself a large market share of the medical revolution Thorpe stumbled upon.
Katie, Thanks for the correction.
My post should have read:
The Company has met with several analysts who believe the market for co-infected HIV/HCV patients is far more promising that the HIV stand alone market.
Regarding your comments on other parts of my post, I can’t respond because I’m just reporting what I heard, not what I know or think.
Some questions didn’t get asked
I regret there were two questions on my list that didn’t get asked. One was your question, Mojo, as to when results of 6 mg dosing will be announced. The other was whether Fast Track designation would be requested as part of HCV 1b protocol. Sorry. Ran out of time, so I have nothing to add on those topics.
Jazz, Thanks for the Correction
My post should have read:
Company is not officially tracking any PH 1a patients beyond initial 12 week period but some viral data will be gathered nonetheless from the doctors who follow these patients.
I also learned that
It’s quite possible HCV Ph II will be done as a combination trial with Ribavirin. While there is some chance mono-therapy repeat dose trial could be sufficient to achieve SVR, Company suspects that Bavi AV will work better in combination with other drugs just as Bavi AC works better in combo. At least one preclinical study indicates that Ribavirin will upregulate Bavi in an anti-viral trial.
As stated by the Company, the combo trial will complete enrollment before year end. One has to assume it will start quite soon.
Obviously Company will compare carefully the pros and cons of HCV mono-therapy results against combo-therapy results before submitting Ph II protocol. Funding needed to run a Ph II trial will be about the same whichever way they go.
IMO, it would seem like the HCV Combo trial would be a good time to introduce the Humanized version of Bavi (90%H;10%M). This would seem especially true if there were a plan to develop Humanized Bavi as a drug for Co-infected HIV/HCV patients as part of a pricing strategy. This remark is purely my speculation.
In recent conversations I learned:
HCV Repeat Dose Trial
If HIV patient is known to have HIV infection, whether positive, active or chronic, patient will not be allowed in this trial. However, the trial sites are not testing for the presence of HIV infection, so it’s quite possible (indeed 40% likely) that many of the HCV patients will be co-infected.
Scripps moved too slowly. Would have been nice to involve them but more important to complete dosing a.s.a.p. Alamo and Godofsky are commercial centers able to move efficiently.
Public announcement will be made when enrollment completes. This could be early or mid August since Company hopes/expects to present repeat dose data at ASLD conference in Boston on Oct 27-30.
Most data could be reported at ASLD conference even if full 12 week period had not run on all 24 patients.
Some top line preliminary data will be released in August when enrollment completes without waiting full 12 weeks.
Company is not officially tracking any PH 1a patients beyond initial 12 week period but some evidence of SVR will be gathered nonetheless from the doctors who follow these patients.
HCV Phase II
Company is already looking at ways to fund Ph II trial, including NIH grant money and alliances with large investment banking houses.
FINANCE
Board realizes that days of UU funding are over. As recently as this week a major bank confirmed they could not have done the $13 million financing on terms nearly as good as those offered by UU. However, if NIH grant money is not obtained, PH II will require alliance with a major wall street player. Several are interviewing for the job already. More will apply when repeat dose data is released.
Even if NIH grant money is obtained, Company will still want to form an alliance now with a major wall street house because you can’t negotiate effectively with BP unless they know you have the deep pockets to finish Phase II/III without them.
HIV
The famous collaboration expected to be announced in 1st half 06 has in fact started but cannot be officially announced for political reasons. Why stir up a bunch of jealous enemies in the market before you need to? It’s not good for our collaborator and it’s not good for us. However, if you’ve been listening to recent SK presentations and reading the slides, you already know who it is. Give me a “D” … Give me a “U” … All will be made public quite soon.
Regarding concern that Bavi’s success against HIV could bring great attention to the stock but also put great downward pressure on the ultimate market price of the drug, there are several strategies for dealing with this concern. One of the strategies has to do with the advantage of having three separate molecules: (1) the current Chimeric Bavi which is 70% human, 30% mouse; (2) a Humanized Bavi which is 90% human and 10% mouse; and (3) a Fully Human Bavi, which is 100% human. For example, the Chimeric molecule could be tested and approved just for HIV patients and carry a relatively low price. The Humanized drug could be the one that is tested and approved for co-infected HIV/HCV patients and have a much higher price.
Analysts do not get excited about the HIV market on a stand-alone basis, but ANALYSTS LOVE THE NUMBERS THEY SEE FROM A DRUG THAT COULD TREAT CO-INFECTED PATIENTS.
INFLUENZA / AVIAN FLU
No success in getting clarification of SK remarks during CC. Company confirms that pulmonary delivery mechanism has received “aggressive” attention at multiple centers, and confirms that going after influenza and other respiratory viruses is more a “when” than an “if” question, but won’t confirm that the delivery mechanism issue has been solved.
CANCER
Cancer trial is indeed going well. Q: “Why is Company so much more willing to make bold, positive statements about Bavi as a cancer therapy than as an anti-viral therapy?” A: “Because we’ve been working in cancer area for almost seven years now compared to 2-3 in viral arena. Company has huge amounts of preclinical cancer data to compare to current clinical data, which bolsters confidence they know exactly how the drug is working in tumors. Thorpe is convinced PS is the best tumor vasculature target that can be found.”
Q: “In what sense are things going better now at MD Anderson?” A: “Well when the docs see results they are more willing to send patients your direction as compared with competing trials.”
Q: “When will we hear results from cancer trial?” A: “As soon as enrollment is complete Company will release top line safety and efficacy data, number of patients who participated in continuation therapy, etc. Company hopes/expects to present hard published data at ASCO in the spring.”
This has not been posted on RB but feel free to do so.
I hope to have conversations soon to clarify and develop certain remarks made in CC.
In the mean time, I note the rumor (not yet confirmed by me) that Company hopes to present HCV repeat dose data at AASLD Annual Meeting in Boston Oct 27-31.
How interesting to see this statement on the web page for that meeting:
https://www.aasld.org/eweb/DynamicPage.aspx?webcode=06_Livermeeting
"Late Breaking Abstracts
Original late-breaking scientific research that was conducted and submitted after June 7, 2006 will be reviewed for presentation at The Liver Meeting."
I ask you, is it just a coincidence that the Company's PR announcing that “enrollment has begun” in HCV repeat dose trial was also dated June 7 ????????
Hmmmmmm.