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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Elmer who wrote (1461)	8/24/2000 9:03:25 PM
From: Biomaven	Read Replies (3) \| Respond to of 52153

Thanks for the compliment, but believe me there are plenty of astute biotech investors on SI - some that don't post that much, though. In particular, I'm not a scientist, so I have to leach off of people like Rick (who doesn't answer to "Richard", BTW <g>). The relationship between early Phase II results and final Phase III results is perhaps the key question in long-term biotech investing. Plenty of examples of products that have looked good in Phase II and then crashed and burned in Phase III, so you can't just blindly extrapolate. Key issues in considering a Phase II: 1. Is there a reasonable theoretical basis for believing it should work. (Including animal studies). 1. Size of study - bigger is obviously better. 2. What was the patient population? Often early cancer trials are done on people near death's door, which makes judging results in the general cancer population hard. But beware too of trials on carefully selected patients. 2. Was it blinded? Often early Phase II's are not. How much this matters depends a lot on the disease. 4. Was there a sensible dose/response relationship? (Harder to judge for immunological stuff). 5. Side-effect profile compared with what you are treating. (Cancer treatment, say, is much more tolerant of side effects than is cancer prevention). 6. Was there a subset analysis? ("the left-handed patients did great") 7. Quality of the institution. Foreign trials, fairly or unfairly, are a red flag. Small biotechs have the tendency to rush the Phase II's and end up with a bad Phase III study. Pharma's have more time and money and so their Phase II's tend to be larger and more predictive of the final outcome. I haven't studied Mylovenge yet, but at first glance it looks like strong results, albeit in a very small group. Peter

To: Elmer who wrote (1461)	8/25/2000 7:56:00 AM
From: scaram(o)uche	Read Replies (2) \| Respond to of 52153

David: This is one where you want to let IR at DNDN do all of the work for you (and for Peter and me). Ask them how this project differs from the one at Idec about 10 years ago, why myeloma differs from lymphoma, etc. Don't get me wrong..... the trial does differ. I am not trying to imply anything other than that the project is a new wrinkle on an old concept. They appear to be avoiding the word "idiotype", when in fact they are trying to immunize against clonally-determined immunoglobulin antigens (idiotypes). Ask them why somatic mutation won't kill this project as it did earlier efforts. A name at Stanford is Rich Levy (see below), but again, the DNDN project is an improvement on the old theme. You might also ask if a competitive project at Vical, using patient-specific DNA vaccines, is still conceptually alive. If so, what will happen to mylovenge in the long-term competitive picture? Every biotech investor should read Nature Biotechnology, from the first day it was published. Rick Blood 1997 May 1;89(9):3129-35 Tumor-specific idiotype vaccines in the treatment of patients with B-cell lymphoma--long-term results of a clinical trial. Hsu FJ, Caspar CB, Czerwinski D, Kwak LW, Liles TM, Syrengelas A, Taidi-Laskowski B, Levy R Division of Oncology, Stanford University Medical Center, CA 94305, USA. The surface Ig on each B-cell lymphoma has unique portions (idiotypes), which can be recognized by the immune system. In this study, we immunized patients against the Ig expressed by their tumor and observed their clinical outcomes. After standard chemotherapy, 41 patients with non-Hodgkin's B-cell lymphoma received a series of injections with a vaccine consisting of tumor Ig protein coupled to keyhole limpet hemocyanin and emulsified in an immunologic adjuvant. Subjects were observed for toxicity, immune responses, and tumor status. The median duration of follow-up of all patients is 7.3 years from diagnosis and 5.3 years from the last chemotherapy given before vaccine treatment. Twenty patients (49%) generated specific immune responses against the idiotypes of their tumor Ig. Two patients who had residual disease experienced complete tumor regression in association with the development of these immune responses. The median duration of freedom from disease progression and overall survival of all 20 patients mounting an anti-idiotype immune response are significantly prolonged compared to the patients who did not mount an immune response. Thirty-two patients were in their first remission and nine were in subsequent remissions before beginning vaccine treatments. Analysis of the 32 first remission patients also shows an improved clinical outcome for those patients who mounted a specific immune response compared to those who did not (freedom from progression, 7.9 years v 1.3 years P = .0001; median survival from time of last chemotherapy not yet reached v 7 years, P = .04). This study confirms an earlier report that patients with B-cell lymphoma can be induced to make a specific immune response against the Ig expressed by their own tumor. It further shows that the ability to make such an immune response is correlated with a more favorable clinical outcome. Prospective controlled trials will be needed to prove a causal relationship between anti-idiotype immunity and improved clinical outcome.

To: Elmer who wrote (1461)	8/25/2000 8:06:10 AM
From: scaram(o)uche	Read Replies (2) \| Respond to of 52153

David: A second answer to your question.... yes, Idec also reported progress before the project was eventually dropped. The Idec effort came in two flavors. The really, really, really dumb one was called "Specifid". My criticism was contemporaneous...... this is not 20-20 hindsight. So...... yes, there's a history of enthusiasm and then failure, with a related effort. Real quickly..... try searching the Vical 10-K for "lymphoma". If you find an active project, ask IR at DNDN if a similar concept to Mylovenge, applied to lymphoma, has influenced their selection of multiple myeloma as an initial focus (you could try a Medline search to see if "somatic mutation" is minimal in MM). If you could come up with the old Idec 10-Ks, you'd get a good concept of how long a company can describe a lousy project in glowing terms. Rick