Endpoint Hit, Stock Walloped: Street, Media Miss the Point?

1. ®
MONDAY VOL. 18, NO. 5
FEBRUARY 1, 2010 Your Weekly Source for Market and Financial Views PAGE 1 OF 20
Poniard Hardly Alone Money Raised By Biotech
Endpoint Hit, Stock Walloped: In 2010 Vs. 2009
Street, Media Miss the Point? Jan. 1 – Jan. 28, 2010: $1,268.58M
Jan. 1 – Jan. 29, 2009: $554.19M
600
By Randy Osborne 533
550
Editor 499
Last week, Wall Street slammed Poniard 500
450 441
Pharmaceuticals Inc. after the company disclosed apparent-
ly good news: an endpoint met in the Phase II trial with 400
Millions
picoplatin in metastatic colorectal cancer. It was anything 350
but the first time that the wider world reflexively failed – at 300
least from the company’s point of view – to understand 250 236
and appreciate study data.
200
What’s a drug developer to do?
150
South San Francisco-based Poniard wanted to show
that the regimen containing its platinum-based 100 57
56
chemotherapy could be given without the neuropathies 50
that plague the standard of care chemo cocktail. 0
The results proved as much, but investors clipped Public Public/ Private
Poniard’s shares by more than 25 percent, as skeptics Offerings Other* Biotechs
picked over the data for possible clues regarding efficacy –
* Includes financings of public biotech firms with the exceptions of
and opined that the picoplatin regimen could be less than public offerings and certain investments from corporate partners.
impressive, compared to what’s already out there.
At the American Society of Clinical Oncology’s 20 1 0 an was 1 3.6 months in FOLPI, 1 5.6 months in FOLFOX
Gastrointestinal Cancers Symposium, Poniard lifted the lid (p=0.53, HR 1 . 1 7).
on final results from the Phase II trial, showing that the At one year, the OS rate was 80 percent vs. 83 percent.
study had accomplished its main goal, proving that Six-month and one-year survival reached 80 percent and
picoplatin in combination with 5-fluorouracil and leucov- 52 percent in FOLPI-treated patients respectively, compared
orin (the FOLPI regimen) dropped neurotoxicity to a statis- with 83 percent and 55 percent in FOLFOX. Poniard said the
tically significant degree (p <0.004) compared to outcome suggests similar efficacy between FOLPI and FOL-
oxaliplatin given as a combo with 5-fluorouracil and leu- FOX, but the company didn’t go any farther than that.
covorin (FOLFOX). Analysts pounced.
In progression-free survival, the median was 6.8 Howard Liang at Leerink Swann conceded in a
months in FOLPI patients and 7.0 months in FOLFOX research report that while the study was small and “clearly
(p=0.82, hazard ratio 0.95). In overall survival, the medi- See Stock, page 4
ACORDA REBUTS THE NAYSAYERS ........................................................2
THIS WEEK IN REPROS OPTIONS RUNNING OUT AS FDA GUIDES ON ANDROXAL ........3
MONEY RAISED BY BIOTECH IN 2010 ..................................................4
BIOWORLD WEEK IN REVIEW ................................................................................6
WORD ON THE STREET, WEEK IN WASHINGTON ..................................7
INSIGHT TOP 5 UNDERWRITERS: RANKED BY GROSS PROCEEDS ..........................8
U.S. BIOTECH PUBLIC OFFERING PERFORMANCE BY UNDERWRITER ........8
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2. MONDAY, FEB. 1, 2010 BIOWORLD® INSIGHT PAGE 4 OF 20
Ltd., but that limits draw-downs to 2.5 percent
Money Raised By Biotech in 2010: of the market cap and a share price of $3.
Poniard was trading at below $2 last week.
Jan. 1 - Jan. 28, 2010 (See BioWorld Today, Aug. 2 1 , 2009.)
Hardly helping the partner hunt is the
Phase III blowup last year of picoplatin in small
42% 39%
cell lung cancer – news that sent shares reel-
($533M) ($499M)
ing by 76 percent. Poniard blamed the fizzle of
SPEAR (Study of Picoplatin Efficacy After
Relapse) on an imbalance of third-line chemo
given to patients in the best supportive care arm
vs. the picoplatin arm, but the market didn’t
seem to care about reasons. McMahon said the
SPEAR results are still being discussed with
the FDA, and noted that Phase II data in
prostate cancer are coming in March. (See
BioWorld Today, Nov. 1 7, 2009.)
Whether any of this will be enough to save
Poniard remains in question, though, and
Oppenheimer analyst Bret Holley predicted
19% the terms of any partnership the firm might
($236M) Public Offerings 39% ($499M)
draw “would likely be fairly modest.”
Public/Other 1 9% ($236M) McMahon is keeping faith that a partner
will know the difference between Wall Street
Private Biotechs 42% ($533M) perceptions and reality, but the stock thump-
ing taken by Poniard stands as a blot that
could make suitors nervous. Among those
who probably feel Poniard’s pain are officials
Stock at Arena Pharmaceuticals Inc.
Continued from page 1 Less than a year ago, after San Diego-based Arena’s
not conclusive, we believe [the readout] does increase the first Phase III trial with its obesity drug lorcaserin met all
risk of a non-inferiority Phase III trial, as the HR is already out- three co-primary endpoints, the company watched its
side of the normal non-inferiority margin of 10–15 percent, shares plummet by 28 percent. (See BioWorld Today, March
and the upper bound of the 95 percent confidence interval 3 1 , 2009.)
would be even worse.” Poniard, with a cash clock that’s Top-line data from the intent-to-treat population of the
ticking, “may not be able to survive” if the firm doesn’t find 3, 1 82-patient BLOOM trial showed that lorcaserin patients
a partner soon, Liang wrote. lost an average of 1 2.7 pounds, or 5.8 percent of their body
No fair, said Jerry McMahon, Poniard’s chairman and weight, while placebo patients lost an average of 4.7
CEO. The Phase II study was not powered for efficacy, he pounds, or 2.2 percent.
pointed out; that’s the work of a larger Phase III effort, to The difference between the two groups, 3.6 percent,
be funded (Poniard hopes) by the big-pharma player who wasn’t quite up to the 5 percent goal in the FDA guidelines,
inks a deal based on picoplatin’s promise in CRC as well but lorcaserin fulfilled the other half of the agency’s edict,
as other cancers. Anyway, “the efficacy measures, all which wants the proportion of patients who lose 5 percent
three of them, indicated comparable efficacy” so far, of their weight on drug to be roughly double that on place-
though they need to be affirmed by more work, he told bo. In BLOOM, 47.5 percent of lorcaserin patients lost more
BioWorld Insight. than 5 percent of their weight, compared to 20.3 percent
Poniard, McMahon said, represents “a very compelling of placebo patients. The news in that department got even
story to partners,” even if “some of the analysts may have better: 22.6 percent of lorcaserin patients lost more than
felt the data in [CRC] were the only data that would allow 1 0 percent of their weight, compared to 7.7 percent of
this drug to be useful.” placebo patients.
The main problem for Poniard – as for so many Wall Street only sniffed, and punished Arena accordingly.
biotechs now – is money. Net cash totaled about $20 mil- By the time lorcaserin’s second Phase III trial, called
lion as of the end of the third quarter of last year, enough BLOSSOM, came around, the company was educating
to last into the first quarter of this year. There’s a commit- observers ahead of data disclosure regarding endpoints
ted equity financing facility with Azimuth Opportunity See Stock, page 5
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3. MONDAY, FEB. 1 2 01
, 0 BIOWORLD ® INSIGHT PAGE 5 OF 20
Stock adverse events. But Anadys also disclosed that three out of
Continued from page 4 24 patients treated in a 1 4-day healthy volunteer study
and their meaning. This worked out better, though the developed a Grade 2 rash and discontinued treatment.
value of the results took a while to soak in. (See BioWorld That’s what sparked the crash, although in this case,
Today , Sept. 2 1 , 2009.) some analysts tried to hold the boat steady. Phil Nadeau
BLOSSOM hit – albeit just barely – the FDA’s 5-per- of Cowen & Co. wrote in a research note that a “1 2.5 per-
cent-weight-loss efficacy benchmark. cent rate of rash in two weeks of dosing is
Just as important, lorcaserin proved sat- “People are making determi- worrisome,” but called the sell-off an
isfyingly safe, a factor in potential pre- nations of how do I flip this “overinterpretation.”
scriptions that some investors may stock quickly, in order not to Gil Bashe, with the public relations
previously have given short shrift. The take any risk? . . . it’s not a firm Makovsky + Co. in New York, said the
obesity market is crowded, but Arena reaction to the data. It’s a problems that beset Poniard, Arena and
has reasonable cause to stay optimistic reaction to many factors in Anadys are far from uncommon.
about lorcaserin, a 5-HT2c serotonin the market at that moment, “We’re dealing in an area where the
receptor agonist, replacing the approved and a lack of understanding ‘tweet’ is more powerful than the read,”
phentermine, beset by side effects. (See of what the data mean .” he said, blaming opinion-based report-
BioWorld Today , Sept. 1 0, 2009.) ing on the blog style of writing, coupled
Another notable historic casualty in –Gil Bashe, Makovsky + Co. with the haste to get news published on
the battle for comprehension: Anadys the Internet.
Pharmaceuticals Inc.’s non-nucleoside polymerase In Wall Street sell-offs prompted by quick, shallow
inhibitor ANA598, for which the company unveiled fateful news reports, “we’re really dealing with managing risk
data in the spring of last year. Shares in San Diego-based more than understanding science,” Bashe told BioWorld
Anadys plunged 40 percent that day, as investors appar- Insight . “People are making determinations of how do I
ently mixed up results from one trial with another – and flip this stock quickly, in order not to take any risk?” In the
ran away fast. (See BioWorld Today , April 24, 2009.) case of Poniard and others, “it’s not a reaction to the data,”
The nosedive happened just a few months after inter- he said. “It’s a reaction to many factors in the market at
im data from a Phase Ib study of ANA598 for treatment- that moment, and a lack of understanding of what the
naïve hepatitis C virus patients sent Anadys’ stock soaring data mean.”
1 1 5 percent and prompted analysts to call the drug a Analysts become part of the problem, Bashe said,
potential “best-in-class.” (See BioWorld Today , Jan. 9, 2009.) because they, too, are under pressure to issue reports
Full, carefully detailed data from the randomized, double- quickly. “The analysts become part of the story” immedi-
blind, placebo-controlled, multiple ascending dose trial ately, since they – rather than, for example, trial investiga-
offered at EASL continued to show strong efficacy, and the tors – are quoted by reporters in stories that are put
drug was well tolerated in the Phase Ib trial with no serious together to meet ever-tightening deadlines.
Acorda patent filing that could extend coverage to 20 1 8.
Continued from page 2 What happens then? Acorda has three programs in pre-
One issue Acorda does not deny, however, is the exis- clinical, but the company is actively seeking assets to fill
tence of an Ampyra patent cliff. The drug’s patents expire its pipeline gap. Macdonald said small molecules or large
in 20 1 3, but orphan drug exclusivity will cover the com- molecules in Phase II or Phase III for neurology indications
pound until 20 1 7. Additionally, Acorda is working on a are the top in-licensing priority.
‘All My Clones’: BioWorld’s Biotech-Themed Soap Opera
Prada-wearing investment banker Odessa shook things up at a luncheon for the New York Biotechnology
Association. She devised the Rational Research Bundle, a new way for big biopharma to invest – even when the num-
bers don’t add up. But will the new M&A idea get her a big enough bonus to buy that marine blue Bottega Veneta coat?
Meanwhile, in California, Cappuccino Pharmaceuticals’ Rupert Madasheck meets the mysterious Vivian. Will her
VarpaWare technology still be able to help his fledgling firm after he learns she’s his long-lost
daughter?
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