T. Mann, I see that Vector has addressed your points. I may add (your concerns between << >> )
<<1.Phase II efficacy was good but not as great (mid 80% - similar to
injectable vaccines). Could this trial be a fluke? (BTW, will AVIR be
required to do another trial this winter?).>>
The recent trial was very very large so a "fluke" is unlikely. I understand that
the total phase III trial had two parts and the second part will be completed
over the next 6 months or so. That's why AVIR is not filing an NDA/BLA this
year. I am not sure what the second part consists of, maybe Vector can help
here.
<<2.Competition. BIOTA/GLX GG167 (nasal drops) offered 100% protection
from all strains of influenza A and B. It is likely to be approved
before the AVIR vaccine. GILD's GS4104 (oral) is likely to show similar
efficacy. It could be approved in 1999. Both of these drugs will
compete with the vaccine. Also, an oral vaccine (Cortecs) could be
available by 2001-2002.>>
Sure, but this is apples and oranges: vaccine vs. treatment (except for Cortecs'
of which I know next to nothing, and which seems pretty far behind). If the
drugs (Biota's and/or Gilead's) (a) work extremely well, (b) have no side effects
and (c) are extremely cheap, one can imagine that some (many? most?) people
may not bother with the vaccine and just wait to get sick and take the drug.
If the above makes sense at all, one can see "competition from the drugs."
Personally, I am not sure it makes sense, and I am even less sure that the
premises a,b,c above will be all true. The drugs will be invaluable in any case for those with very weak immune systems to whom the vaccine will do no good.
<<3.I've had a brief conversation with a friend virologist who mentioned
possible complicating issues with the AVIR vaccine. a. Stability of the
cold attenuated virus has been known to be a problem. b. A possibility
that the genetically altered influenza virus would revert to its wild
form. (This person does not know if these issues have been addressed by
AVIR).>>
Check AVIR's most recent 10K or the prospectus (S-1 form, I believe); I seem
to recall that they do touch upon these issues. I have also seen abstracts out
of Aviron's research addressing these or related issues. You can bet that both AVIR and the FDA have thought a lot about these issues. How much they are sharing with the public is another matter.
<<4. More questions: Why the data was not presented at an appropriate
scientific forum? The ICAAC in Toronto is less than 2 months away. Why
the vaccine development was dropped by Ayerst and the rights returned
to the U of Michigan? A lack of patent protection or something else?>>
I cannot add much to Vector's answer - I agree with his view. The Wyeth-
Ayerst drop is just a bit worrisome, but large pharmas are always dropping
projects and vaccines were seriously out of fashion at around the time of the
drop; finally, W-A was being refocused into women's health almost exclusively.
<<5. Valuation: With AVIR stock at $13/share, it was already known that
the vaccine works well. Is the 8% difference between 85% and 93%
efficacy really worth $20 at this point?>>
No, no, no. Nothing is "known" until you have enough phase III data. The
$13 value reflected uncertainty on wether the vaccine would work at all and
serious concerns on AVIR's weak cash position. Now the uncertainty that there
will be a product in the market (in 2 years or so) has dropped to almost zero. I am
not sure if removing this huge unknown is worth $20, $5 or $50 per share, but it
is for sure worth something. Also, the 93% (or therabouts) efficacy marks an
almost qualitative leap as it relates to the ultimate size of the market being
served (even if it is just children, as one should assume for now being
conservative). In analyst's speak the recent announcement permits the use of
a much smaller discount factor or, as other people like to do, keep the factor
the same but assign a much larger probability of success (say, from 50/50 to
95/5 or so) for FDA approval and product launch.
Hope this helps, and feel free to argue further.
PB |
