Another Approval

Idenix (IDIX) received approval for their HBV drug Tyzeka / Sebivo / Telbivudine this week. The label seems to be as expected, so we now wait for the start of sales which will reportedly start in November. IDIX was purchased into the portfolio at a fortuitous time and a good price, but approval has not sent the stock soaring... unless you're looking at the chart upside down.

This is actually the second approval for a stock in the portfolio, the first being GTCB's Atryn. Approval there also landed with a thud, as the stock has been down appreciably from the portfolio's purchase point.

The moral of the story? Perhaps the market is putting on more of a "show me" stance towards approvals. The share price of IDIX and particularly GTCB suggests that few are willing to give these two drugs the benefit of the doubt on upcoming sales. Arguably GTCB has had a financing that makes the situation a bit more complicated, but nonetheless, the share price is what it is.

One additional wrinkle to the IDIX story is their HCV drug valopicitabine. Vertex is demonstrably the leader of the pack for experimental HCV therapies, whereas valopicitabine has had a bit of a stumble this year. For IDIX, this has created an asymmetric situation. Forward progress on valopicitabine will likely show a muted effect on share price because the market is expecting VX-950 to eat everyone's lunch. On the other hand, negative news from valopicitabine will tank the stock because the HCV market is perceived by the market to be the crown jewel. With valopicitabine likely dominating IDIX's share price, I think this asymmetry may present a future buying point provided that Telbivudine sales are tracking satisfactorily.


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GPCB / PHRM's drug satraplatin recently demonstrated a significant delay in PFS for prostate cancer. Share prices for those companies have responded positively. It struck me the other day that in a previous email correspondence, I spoke cautiously / negatively regarding satraplatin. It stemmed from an imbalance in the performance score (PS) for the two arms of a phase II trial, where there were more PS = 0 patients in the satraplatin + prednisone arm (44%) versus 30% in the prednisone arm. My concern stemmed from the fact that the PFS result in that phase II may have been driven more by the discrepancy in PS rather than the addition of satraplatin. Obviously that concern has been invalidated by the strong PFS result in the phase III SPARC trial. So although a healthy dose of skepticism is good, perhaps being overly fearful of every discrepancy isn't constructive. Adjusting the total investment in these circumstances appears to be a much better option than not investing altogether. In hindsight, I would think that a 5% position is suitable in situations where the only thing keeping one away is a relatively small detail. I'll have to keep this in mind for next time.


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Other stuff: COR seems to have been stabbed in the heart again. Sorry guys... safety concerns are really a black box. They're harder to predict than efficacy, in my opinion.

DNDN continues to get mileage out of their trial data, especially 9901. There's always that one guy at a meeting putting up the raggedy poster with dozens of pinholes on the corners because he's gotten some great mileage from it. Those would be the DNDN guys, if it wasn't for powerpoint. I still think they're going to get an approvable letter, and the FDA will wait for 9902B data. Even if they get approval, 9902B remains the make-or-break trial. Approval on 9901 + 9902A will provide some sales, but those sales would obviously be strengthened by positive 9902B. But if Provenge is on the market and 9902B fails, you can kiss sales goodbye. So in a way, approval on 9901 + 9902A is, in a bizarre manner, almost a non-event pending 9902B results. This one may also fall into the "show-me" situation insofar as the market's reaction based on 9901 + 9902A approval.


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2006 Big Event Tally, or the BET (a strangely appropriate acronym for the biotech sector):

Approvals: Two (GTCB's Atryn and IDIX's Tyzeka)

Failures: One (SGXP's Troxatyl)

At 67%, it's still better odds than Vegas, so the portfolio lives on.


Next Up: Speedel (SPP100 / Rasilez / Tekturna) and Telik (TLK286 / Telcyta)


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P.S. Speaking of Vegas, myself and a couple of friends want to go for the NBA All-Star game. If anyone has leads on tickets that are not $1500 apiece, drop me a line :-)

P.P.S. I do like biotech discussion in general. If there is a company that you're interested in, drop me a line and I'll post the info I have, if any.