| | | The "problem" in my mind would be having to do with the small data set. 100 pts is just too small to draw firm conclusions. There is a statistical error bar involved that is rather large with small data sets. You flip a coin 4 times and you get 4 heads in a row, doesn't mean you can draw some conclusion about whether the coin is not in the long run going to flip 50% heads. You flip it 400 times, the data becomes much more robust. This is what blew up Emab, the P2 data was quite good, but the sample was too small, and the data could not replicate with 1600 pts. Now solid tumor response rates are more objective than SLE response rates, and I am certain (well, fairly certain) that 132 is an effective drug. But if you asked me will it have 30% PR rates in real world use, I would say I don't know. It could have a 10% PR when you get to 1000 pts, and we were just fooled by a lucky data set in the first 100. Or it could have a 45% PR rate on the upside. Without a full size P3 trial there are some unknowns here. For the FDA to allow IMMU to get a shortcut to approval without a P3, which is the standard and objective way to approve drugs, the case has to be very compelling. I think the case is very compelling, but being objective, I also have to concede that a conservative approach by the FDA may not see it that way. It would be different if 132 was curative for TNBC, but it is not, at best it extends the lives of less than 50% of the patients who receive it, at extremely high cost.
Let's say a new cancer drug that costs 500k per patient gets through a trial for lung cancer showing that it really does extend life by 1 month over existing therapy. Should the FDA give that an approval? I personally wouldn't.
One also has to consider if the "issues" that Pehl referred to are of a significant nature. Have some patients developed a toxicity that was not evident earlier? Is there some problem with confirming the PR rate by CT scans and how they were interpreted?
I don't write this to scare people or to suggest that it is unlikely that IMMU gets approval. This drug has BTD and the FDA did accept the BLA for AA. All else being equal, we should have approval in the next 7 weeks or so. Being prudent though, I have to concede the possibility that we don't, and the significant downside risk if the company needs to do a full P3 trial for TNBC. I think that rationally explains our price weakness. On approval I would expect the stock to get to 30-35 dollars, so when we were at 27 dollars we had pretty much priced in the best case scenario. The stock price I think now better reflects risk/reward. If you own IMMU without any margin at risk, I still would hold it here as I think the upside scenario is far more likely. But if you have huge gains and have not taken any off the table, consider your financial situation and make the wise choice. This is a classic fear vs greed scenario.
I've sold about 10% of my position in the last few weeks and I'm thinking of buying some Feb calls instead to capture the upside if we get approval and the stock takes off. |
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