Replies to post #3922 on Biotech Values

[rkrw]

GNLB. Redo trial to confirm first phase III, fails. Crushing blow for gnlb.

Press Release Source: Genelabs Technologies, Inc.


Genelabs Announces Preliminary Results of Clinical Trial GL02-01 in Women With Systemic Lupus Erythematosus
Tuesday October 5, 7:46 am ET
- Study Fails to Meet Primary Endpoint


REDWOOD CITY, Calif., Oct. 5 /PRNewswire-FirstCall/ -- Genelabs Technologies, Inc. (Nasdaq: GNLB - News) announced today that a preliminary analysis of its Phase III clinical trial, Study GL02-01, for its investigational lupus drug Prestara(TM) (prasterone) indicated that the study failed to meet its primary endpoint. This double-blind, placebo controlled clinical trial was designed to measure the effect of Prestara on the bone mineral density of women with systemic lupus erythematosus (SLE or lupus) receiving glucocorticoids.


The company plans to continue its analysis of the data from Study GL02-01 and will seek to meet with the U.S. Food and Drug Administration (FDA) to determine its next steps.

"Although these preliminary results show that this study failed to reach statistical significance, we are continuing to analyze the data in order to gain further understanding of the results," stated James A.D. Smith, President and Chief Executive Officer. "This process typically takes some time, and I regret that we will likely not have further information to provide on Prestara until we have completed these steps."

Genelabs previously completed a one-year Phase III clinical trial, designated Study GL95-02, which included a nested study that indicated that the group of patients receiving Prestara had increased bone mineral density, compared to a decrease in bone density for the group of patients on placebo. Based on these results, the FDA issued Genelabs an approvable letter, the key contingency of which was a further clinical trial to confirm these results. Study GL02-01 was designed to generate data to confirm the Study GL95-02 bone mineral density results.

[DewDiligence]

Cleveland Clinic’s Dr. Topol may need a lawyer of his own:

[Ah, the perqs from being known as “Mr. Cardiology.”]

http://www.fortune.com/fortune/subs/article/0,15114,832265,00.html

>>
A Bitter Pill For One Merck Critic

Eric Topol sat on the medical advisory board of a hedge fund that was selling Merck short.

FORTUNE
Monday, November 29, 2004
By Bethany McLean

Long before Merck withdrew Vioxx from the market this fall, a doctor named Eric Topol, the chairman of cardiology at the prestigious Cleveland Clinic, had emerged as one of the drug's chief critics. After the drug's recall, Topol was widely quoted criticizing Merck's handling of the matter, even accusing the company in a New England Journal of Medicine article of putting "sales over safety." But Topol had another role that, on the surface, could raise questions about his motivations. The situation illustrates the conflicts that can emerge when doctors step outside the world of medicine and become entangled with Wall Street.

At the same time he was criticizing Merck, Topol served on the scientific advisory board of a $176 million hedge fund called the Biomedical Value fund, run by Great Point Partners. According to the fund's April 2004 marketing material, obtained by FORTUNE, advisors such as Topol were expected to "provide 'heads up' in advance of major medical meetings to 'get the jump' on trading/investment strategies." An October 2004 presentation adds that its board of advisors are "active participants in the Fund," and a "source of proprietary investment ideas." And it says that $17 million of the fund's capital comes from founders and advisory board members.

The fund has performed spectacularly—and part of its recent gain is directly attributable to the fact that it was shorting Merck. In its September 2004 performance summary, Great Point Partners gave Topol a portion of the credit. "Vioxx, while good for your arthritis, can be very bad for your heart. Eric Topol, M.D., of our Medical Advisory Board, has been singing this tune since 2002, and we were on the right side [short] of that situation."

In an interview, Topol said that he had no knowledge of Great Point's investments—and never gave it advance information. He added that he had no money in the fund and received only a "nominal" annual fee. In a later interview, Topol said that after learning from FORTUNE how the hedge fund was describing his role, he immediately resigned. "I'll never work with them again," he said. (Dr. Jeffrey Jay, the co-founder of Great Point, did not return FORTUNE's phone calls.)

That wasn't the only connection between Great Point Partners and Topol. On Jan. 6, 2004, Topol was appointed the chairman of the advisory board of a Canadian company called Forbes Medi-Tech, which is developing a cholesterol drug. According to the company's filings, Topol got one million options. That same day Forbes Medi-Tech announced that it had raised $10.75 million from a group of investors—including Great Point. Forbes Medi-Tech's CEO, Charles Butt, called the combination of the financing and Topol's appointment a "strong endorsement of the prospects for our portfolio of cardiovascular compounds."

Investors stampeded into the stock. Then, three months later, Forbes Medi-Tech announced results from the clinical trial of its drug. "Data meets primary endpoint in cholesterol reduction" read the press release, which quoted Topol as saying that the trial "produced statistically significant results, which establishes that the compound lowers cholesterol." He added, "I am looking forward to working with Forbes on the next phase of its clinical development program."

In fact, the trial showed that the drug reduced cholesterol less than the FDA mandate—which explains why the stock plummeted. CEO Butt still stands behind the drug, saying that the trial was simply "proof of concept" and that he does not view the results as disappointing. But Topol has backed away, telling FORTUNE that the results were "disappointing." When asked about the press release, Topol says, "It can be a struggle working with any company if things aren't particularly rosy," and that his words, while positive, were "very different from how they wanted me to come out."

Because his options were contingent on the drug's success, Topol said he didn't stand to profit because the drug has "no future." Then, in mid-November, Forbes Medi-Tech announced that Topol was leaving its board due to increased demands on his time; as a result, he forfeited all his options. According to the press release, the new head, Dr. Steven Nissen, also of the Cleveland Clinic, "stipulated that any compensation for his consulting services be directed to charity, and therefore, he will have no financial relationship with the company." Wise move.
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