Another article slanted against CLTR.
Quite a broadside from IIO! Heavily influenced by the shorts as you mention, and sneeringly dismissive of the analysts who remain positive. As I suspected, one of the biggest issues going forward now will be management credibility, and the shorts should be expected to shower the writers they know with this argument. But IMO, the arguments here aren't entirely convincing, a little bizarre in one case, and the writer just seems to have let himself be a mouthpiece of the shorts, who haven't seen fit to confine themselves to quality arguments as yet (happy to beat CLTR with any and every stick they can find so far).
They've really latched onto the 45 vs. 60-day notification issue, and they've got an argument here worth some thought, although I don't think it's an open-and-shut case. How do we feel about management credibility now? First, from the IIO piece...
On June 30th, Bexxar was submitted for FDA marketing approval as a Biologics License Application (BLA). The FDA has 45 days from that point to accept, request additional information or reject the BLA, which in Coulter's case was granted 'priority review' status.
The company even noted this timeframe in a July 22 press release.
OK, lets see what was in the July 22 press release from the company:
The FDA is expected to determine acceptability of the license application within 45 days of the submission.
That's "determine acceptability", not "notify us" or "have completed all discussions with us about any potential problems" or "officially notify us with reasons for rejection". I'm OK so far.
I think the bigger question has to do with the contention by Coulter that they didn't know the filing was in trouble, and were blindsided by the rejection letter. How do we explain the following statement from the article?
A spokeswoman for the company called the letter 'unexpected' and said Coulter had not received any word from the FDA of the application's status prior to it.
Sounds fishy at the outset, we know that all kinds of discussions must have been going on between company representatives and the FDA. Ultimately not damning to me, however, because we don't know how the FDA issues were represented to Coulter as the process went along. Perhaps the issues were not presented up front as showstoppers which would necessitate re-filing the BLA and starting the six-month clock over - so it's possible Coulter was aware of the issues and had discussed them with the FDA, but ended up surprised that they turned out to be show-stoppers. If this wasn't the case, its still possible that it was a complete blindside from some overburdened FDA staffers who hate the 6-month priority review process, as has been suggested - if they really wanted more time, the best way to get it would be to throw out some previously unmentioned or little-mentioned issues at the last minute. Ultimately, only those closest to the action here know the real story, for investors perhaps it now depends on whether one is still willing to give management the benefit of the doubt on this.
As far as the timeliness of notification - we have been told that the official FDA notification was faxed to Coulter on day 60. Assuming this is true, what were the valid options for management notification of the public and shareholders? If we buy the argument of the shorts, Coulter should have issued a press release something like this on day 45:
Our application has been rejected.
We can't tell you much about why, we don't have the official letter from the FDA yet.
We're still discussing with the FDA exactly what these points are, but trust us, they look minor.
Imagine the shareholder panic we might have gotten. A nice rule-of-thumb about dealing with powerful bureaucracies - don't publicly misrepresent their communication to you, accidentally or otherwise. If you've been having some discussions, and they're going to send you an official letter about an issue, wait until you get it before issuing your press releases about what's going on. If I'm management, I want a signed FDA document in my hands before I make public statements about how they view my filing.
IMO, I'm quite satisfied with how management handled the notification. At the same time the news came out, management gave or had given to analysts detailed information about what the holdups were, based on the official FDA notification, and folks were able to make informed decisions about the severity of the delay. I, for one, was able to make much better decisions about what to do based on that information, than if I had gotten some panicky, vague, unofficial information about a rejection on day 45.
As for the somewhat bizarre part, I submit the following from the article:
He also has some issues with the technology itself. 'Even if this drug is approved, it's not going to be as significant a player as people think,' says Sadeghi. Bexxar uses a radioactive isotope that he notes will prevent the majority of oncologists (dealing with cancer) to administer it themselves, thus discouraging them from using it except as a last resort.
Huh? Right now, Bexxar looks to be the single most powerful agent we have against low-grade NHL, with a surprisingly moderate side-effects profile. So none of these characteristics will prove strong enough to gain more than a salvage role, especially versus toxic chemo regimens? Perhaps Mr. Sadeghi doesn't agree that Bexxar represents a significant treatment advance, but I think he's fighting an uphill battle against the trial data so far. If there's a clear treatment benefit shown for using Bexxar at any point in a patient's treatment versus the alternatives, oncologists will prescribe it at that point, regardless of where it will be administered. But if Mr. Sadeghi is willing to admit that there's some likely treatment benefits to using Bexxar (which seems implicit in his assumption we will be able to use it as a last resort treatment), then we'll have to conclude that Mr. Sadeghi must be unfamiliar with the cancer treatment modalities known as radiotherapy and surgery - commonly administered as first-line cancer treatments, but not ordinarily administered by the general oncologist in his office. By this sort of logic, we would have to conclude that all cancer patients generally receive drugs as their first line therapy because that's the easiest thing for their oncologists to do...
Finally, regarding the competitive situation with Zevalin. From the article:
Even assuming an eventual FDA approval, there are competing products coming to market. Sadeghi specifically refers to IDEC Pharmaceuticals' (NASDAQ:IDPH - news) opportunity to catch up with its Zevalin drug now in Phase 3 trials.
I'll be more excited about Zevalin when IDEC is able to show us results from a Zevalin trial that don't include over half of the patients experiencing severe or life-threatening (grade 3 or 4) myelosuppression, unlike the mostly moderate myelosuppression seen in Bexxar trials. Numerous other areas where Zevalin appears inferior, but I'll take improvement in this area for starters...
Gordon |
