Usual disclaimers: I have been long HGSI for over 4 years (it is my co-#1 stock pick) and have sold a significant percentage over the past year so as not to have “too much” of one security in relation to my entire portfolio. Since I am a physician, some of the medical terms and clinical uses of the drugs may be more understandable to me than those in the general population. I claim no special knowledge in either the basic sciences or finance, nor do I have any additional access to information about HGSI than does any other investor.
Note 1: I encourage anyone who has an opinion about HGSI to post. I especially appreciate the posts from people who short HGSI stock, since they obviously have fundamental and/or technical views that may be different from my own.
Note 2: I will not provide links or references to previous posts and press releases in this post; that’s too much work for me today.
As I have previously discussed, there are at least three major HGSI “stories” that will soon be announced:
1. The results of the KGF-2 Phase II trial for chronic ulcers will be announced early next week at the wound healing conference. Per the preliminary results, there is efficacy. To what extent, we will soon find out.
2. The FDA decision as to the future of clinical trials for KGF-2 for wound healing should also be announced soon. As I have previously posted, I am concerned about the future trials because of the wording of the original press release. It stressed the safety aspect of Phase II trials and downplayed the importance of efficacy in a Phase II trial: in my book, not a very reassuring emphasis. Also, it said that the drug resulted in more “partial” healing than placebo. In the past, the FDA has been quite interested in “complete” healing. Where does that leave us? Perhaps, the results are good enough to proceed to Phase III. But maybe, they are not that good, and a longer Phase II trial may be needed to show ultimate complete healing of the wound. This would obviously delay the time to market by 1 to 2 years.
3. The FDA decision on the VEGF-2 trials should be coming soon. Clearly, the drug is efficacious and there is a clinical need for it. Thus, it seems there is a ethical and medical imperative to continue testing of this drug. However, from the complaint that the FDA lodged against the investigators, it seems that both the study protocol was violated and there was evidence of poor medical care involving failure to diagnose and follow-up a serious medical condition. (Of course, to be fair, we have only heard one side of the story.) I don’t know how this will turn out but one thought I did have: if the FDA thinks the drug is “good” and the investigators are “bad,” isn’t it somehow possible that different investigators could carry on with the trials if the FDA and Isner can’t work it out??
Good luck to all!
Regards,
Steve Rachbach |
