To All, a research report from June on StressGen/Roche delay for manufacturing ramp up:
PROHOST RESERCH
IMPACTING NEWS. JUNE 11, 2003
ABOUT STRESSGEN
After millions of years of walking or riding donkeys, a company invented a train that can finally solve the time/distance/effort problems. Investors' anger that they will have to wait until the company lays the tracks exceeded their enthusiasm about the train itself and decided to sell their stocks. This is what investors did yesterday, selling their shares in StressGen. Their furry stemmed from StressGen's decision to enhance its manufacturing capability so it can prove its competence to manufacture large quantities of the same molecules used in Phase III trials. The drug in question is StressGen's HspE7, whose trial results were extremely promising in saving children that suffocate from polyps growing into their respiratory tract with no hope of treatment, except frequently repeated invasive surgeries. HspE7, developed by StressGen demonstrated that it has substantially decreased the frequency of recurrences of respiratory papillomatosis (RRP) in children. The drug demonstrated statistically significant reduction in the number of surgeries for the seriously debilitating and life-threatening condition. (See Prohost impacting news of June 10, 2003 on Prohost website: www.prohostonline.com.). The delay, which caused investors to throw the stock, is expected to be 6 months beyond some analysts' estimates?!
The truth is that such a delay is not a delay. Each and every firm has to prove that drugs used in Phase III trials are identical to the marketed product. StressGen decision was wise. Usually, when firms do not take care of this fact before embarking on Phase III, they would probably lose more time when they will be obliged by the FDA to conduct more trials with the typical product intended for large scale marketing. This is exactly what happened with Xoma and Genentech last year when the firms intended to use a superior version of the drug, Raptiva, instead of that used in trials. The FDA decision that the firms must use the same molecules in Phase III trials was painful to the firms and investors and the delay in filing was longer than the six months that stirred investors' anger.
StressGen is a small, overlooked company that is hard to follow and trade in the U.S. The firm's anti-viral vaccine technology attracted Roche as a collaborator. The large pocketed firm expressed interest and readiness to invest millions of dollars on StressGen vaccine. As a matter of fact, the tiny firm has recently received two milestones payments from Roche: an equity investment of approximately US$3,000,000 and a development milestone payment of approximately US$1,500,000.
The successful outcome of HspE7 Phase II trials and the new hope of saving children suffering from RRP is historic news. The anger about the six month required to lay the tracks before the train can run is nothing but irrational.
prohostonline.com
Another take on the switch to high volume production capability right now. When HspE7 for the RRP indication gets approved, the potential for off label sales is tremendous- Cervical cancer, anal cancer, genital warts, unfavourable Pap smear results, some head and neck cancers.
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