Comments (continue).

BIOD (short)

September 22th, 2010 by BiotechInvest

Well, as I promised before I will write comments about all companies that have binary events in October. Since first post was extremely positive (ALXA), next will be negative. So, it will be about Biodel.

Usually I try to analyze company science basis before investment. Here (with Biodel) is nothing to analyze. Biodel’s VIAject (now Linjeta) is just a simple mixture of conventional insulin, EDTA and citric acid.
Now Biodel called VIAject enough modestly "more-rapid-acting injectable regular human insulin". Modestly because couple years ago they called it "ultra rapid-acting insulin".
"More-rapid" than what?
Insulin lispro (marketed by Eli Lilly as "Humalog") is a fast acting insulin analogue. The subcutaneous doses of Humalog ranging from 0.1 to 0.4 U/kg, peak serum levels were seen 30 to 90 minutes after dosing. VIAject T max is around 30-40 minutes (company website) i.e. VIAject is really 20 minutes faster than Humalog. Humalog was engineered through recombinant DNA technology, the penultimate lysine and proline residues on the C-terminal end of the B-chain are reversed. This modification does not alter receptor binding, but blocks the formation of insulin dimers and hexamers. This allowed larger amounts of active monomeric insulin to be immediately available for postprandial injections.
Biodel scientists just added citric acid to destroy hexamers first and EDTA to remove zinc (that actually stabilizes insulin hexamer). From the first point of view VIAject is genius invention ("Everything of genius is simple.").
Question is why big pharma scientists invented Humalog when they wanted to have a fast acting insulin. May be scientists in big pharma are so stupid that even never tried to dissolve insulin at low pH and add EDTA to remove zinc. But sure that they knew that "insulin is produced and stored in the body as a hexamer (a unit of six insulin molecules), while the active form is the monomer. The hexamer is an inactive form with long-term stability, which serves as a way to keep the highly reactive insulin protected, yet readily available. The hexamer is far more stable than the monomer, which is desirable for practical reasons; however the monomer is a much faster reacting drug because diffusion rate is inversely related to particle size. A fast reacting drug means that insulin injections do not have to precede mealtimes by hours, which in turn gives diabetics more flexibility in their daily schedule. Monomeric insulin can aggregate and form fibrillar interdigitated beta-sheets. This can cause injection amyloidosis, and prevents the storage of monomeric insulin for long periods." In simple word monomeric insulin is very unstable.

However, first generation of VIAject was very painful because injected solution was very acid (pH 4). Now adjusted to pH 7 it seems like OK for patients.
So, VIAject was provided as an aqueous solution which is stored frozen, or in a two part kit consisting of dry powder insulin and diluent, at least one of which contains citric acid and EDTA. The pH of both reconstituted mixture and frozen solution was approximately pH 4. Everything should be mixed shortly before or at the time of administration. Well, conversion of hexamer to monomeric insulin happens right before injection and there is no problem with stability. However, at time of human trial it was suddenly discovered that acid solution (pH 4) is very painful if injected subcutaneously in human. 
So, Biodel proposed to use U-100 pH-neutral commercial formulation of VIAject® is associated with less injection site discomfort than the U-25 pH 4. In a regulatory filing, Biodel said it would launch VIAject only after a disposable pen version of the human insulin product is approved and plans to submit the pen to the FDA for review in early 2011.

Well, it seemed like that the problem was completely resolved. Of course, I understand that pH 4 can be easy adjusted to pH 7 with sodium hydroxide. But what the form of insulin will be in this adjusted solution?

Again, at pH 4 (citric acid) and EDTA insulin is monomeric, but you must immediately inject it because of stability problem. If you adjust this solution to pH 7 (to reduce injection site discomfort i.e. pain) insulin must aggregate in hexamer or stay monomeric because EDTA cheated all zinc. Here is the problem. What will be inside this proposed "disposable pen version" of VIAject?
This question is like logistic trap. If the answer is: solution of monomeric insulin. Everybody knows that solution of monomeric insulin is very unstable. If the answer is: solution of hexamer insulin i.e. after adjusting pH to 7 insulin converted back to hexamer form. This is the stable form but it will be just conventional insulin.
The main idea of VIAject invention was to keep separately conventional hexamer insulin (dry powder) and diluent solution with citric acid and EDTA. Patients should mix it together before injection and use it immediately. I don't see here any problem with stability of insulin. May be this is not very comfortable as insulin pens but it's OK because it's "ultra rapid-acting insulin".
Now Biodel is seeking approval to market VIAject® in the United States as a 100 IU/cc, pH7 (neutral) injectable liquid, in 10 ml vials and 3 ml pen cartridges.
So, FDA may ask questions what is inside of these pens. Monomeric insulin solution? It's very unstable. Hexamer insulin solution? What is the advantage?

"India clinical trial" problem…

"Biodel believes that including the data from India is not valid for determining non-inferiority. If HbA1c data from India are included in the analysis, the adjusted treatment group difference increases slightly to -0.3 which is generally considered to be not clinically meaningful.
Biodel Submits VIAject® New Drug Application to FDA for Treatment of Diabetes based on more than 884 patients who participated in Phase 1, 2 and 3 clinical trials of the drug in the United States, Germany and India. I'm sure that FDA officers will never separate United States trial data from India data. In this case conclusion is clear: VIAject is working worse than Humalog.

It's very high probability that Biodel will get FDA "complete response letter" with recommendations to perform new efficacy trials and questions about formulation stability.

Disclosure: no BIOD positions now, may be short positions will be opened close to PDUFA.

ISTA (buy)

September 23th, 2010 by BiotechInvest

After negative Biodel comments need something positive. I picked ISTA because it’s very simple story with predictable happy end.
ISTA “new” product Bromday (old name XiDay™) contains 0.18% of active agent bromfenac (non- steroidal anti-inflammatory agent). Currently marketed XIBROM™ contains 0.09% of bromfenac. XIBROM ophthalmic solution is indicated for the treatment of postoperative inflammation in patients who have undergone cataract extraction. For the treatment of postoperative inflammation in patients who have undergone cataract extraction, one drop of XIBROM ophthalmic solution should be applied to the affected eye(s) two times daily beginning 24 hours after cataract surgery and continuing through the first 2 weeks of the postoperative period. New formulation Bromday is a once-daily version of Xibrom.

In April 01, 2008 ISTA reported topline results of a clinical trial of Xibrom(TM) (bromfenac sodium ophthalmic solution) QD (once-daily) 0.18% formulation, a new formulation of ISTA's ocular, non- steroidal anti-inflammatory agent. The findings demonstrated equivalence between the 0.18% formulation and ISTA's 0.09% formulation of Xibrom given once daily in achieving the primary efficacy endpoint of absence of ocular inflammation 15 days following surgery. The data also showed no statistically significant difference between the two formulations in achieving the secondary efficacy endpoints of elimination of ocular pain and mean reduction of markers of inflammation (inflammatory cells and flare). In addition, the results indicated both formulations of bromfenac produced a low overall incidence of ocular adverse events. In December 2009 ISTA filed a sNDA with the FDA seeking approval of the Bromday formulation for once-daily treatment for the inflammation and pain following cataract surgery. Prescription Drug User Fee Act, or PDUFA, is October 16th, 2010.
Bromday is protected by US patent # US2007/0287749 A1 granted in December 13, 2007.
Actually that’s all story. ISTA expects sales from its Xibrom in the range of $95 million to $105 million, so Bromday sales will be in the same range. There are no any problem with new formulation safety because it actually same formulation with 2 times increased concentration of active component bromfenac.


Probability of FDA approval is close to 100%. So risk is very low and reward is moderate. Last ISTA earning release gave average 20-25% gain, so FDA approval may push ISTA price another 25-30% to $4.5-5 range.

Disclosure: no positions of ISTA, will add this week.

September 23th, 2010 By BiotechInvest

HGSI (Neutral)

Honestly, I like HGSI and it's science (well, it’s against my rule “never fall in love with stock”, but each rule has the exclusions). I found this biotech gem when HGSI pps was $2-3 range and had some significant stake at time of lupus trial results.

But ZALBIN (also known as JOULFERON®) is not the best HGSI product. Albinterferon Alfa-2b (Albuferon) is a results from the genetic fusion of human albumin and interferon alfa. Research has shown that genetic fusion of therapeutic proteins to human albumin decreases clearance and prolongs the half-life of the therapeutic proteins.
Actually it is very good idea to link physically albumin with interferon.
I remember Novo Nordisk Victoza® (liraglutide) was also designed to bind with endogenous albumine with same purpose to prolong GLP-1 half-life. But they used another technology.

Any way, topline results demonstrate that albinterferon alfa-2b met its primary efficacy endpoint of non-inferiority to peginterferon alfa-2a, with 79.8% (249/312) of patients achieving SVR in the 900 mcg albinterferon alfa-2b treatment group, vs. 84.8% (263/310) in the peginterferon alfa-2a treatment group (p=0.0086 for non-inferiority).

Well, peginterferon alfa-2a (Pegasys of Roche) dosed once a week, 900-microgram Zalbin, dosed twice monthly. It seems like Zalbin is better than Pegasys in term of patient comfort. But recently, Human Genome Sciences Inc. announced that its hepatitis C candidate Zalbin is unlikely to get a favorable verdict from the US Food and Drug Administration (FDA) at its current dosage. FDA has concerns regarding the safety of 900-microgram Zalbin, dosed twice monthly. The feedback was provided by the regulatory authorities via a “discipline review” letter. The agency communicates a preliminary analysis on possible shortcomings of an application via such a letter.

So, Zalbin efficacy is OK, but safety is a real problem.

Disclosure: very high probability of negative CRL about Zalbin, may be FDA will ask HGSI to perform additional safety trial. Not big deal for HGSI price because company has real gem Benlysta (approximate FDA panel date is November 16th). May be HGSI will lose a couple bucks after negative FDA answer, so it will be good entry point.
No HGSI positions now, may be to buy November 30-33 calls will be good idea.

JAV/Hospira (neutral or buy)

JAV/Hospira Dyloject™ (diclofenac sodium injection).

Javelin completed randomized, four-way cross-over phase I clinical study comparing the pharmacokinetic, bioequivalence and safety of Dyloject™ to Voltarol® when administered intravenously and intramuscularly. Dyloject™ was found to be bioequivalent to Voltarol® regardless of the method of administration and was safe and well tolerated. At all dosage levels tested, Dyloject™ provided statistically significant post operative pain relief through 6 hours (p <0.05) and was safe and well-tolerated by patients. Injectable diclofenac is already marketed in United Kingdom & Scotland with indications of post operative pain and anti-inflammatory.

Disclosure: HSP pps now is around $55 with market cap $9.21B. This big pharma has enough broad drug portfolio so approval of Dyloject™ will add not so much. However it will positive news for HSP, so may be share price will add $2-3. No position in HSP.

September 28th, 2010 by BiotechInvest

It’s time for short eulogy to AVNR (strong buy).

When I found what is the new Avanir drug is for Pseudobulbar Affect (PBA) I was slightly shocked. Wow, the combination of cough (cough suppressant) drug and antiarrhythmic drug (30 mg of each drug) can be effective in reducing the severity of PBA?
The pathophysiology of PBA is currently unknown, although the disorder is thought to occur exclusively in the setting of neurological disease. The most influential theory on PBA posits that emotional outbursts are being generated in the brainstem autonomously due to loss of regulatory control by the frontal lobes. Although rarely life-threatening, PBA can have significant impact on patients’ quality of life and thus merits treatment. And the combination of cough suppressant and antiarrhythmic drugs helps to easy symptoms of this serious neurological disease and control emotional outbursts?

However, the results of clinical trials were impressive and published in peer-reviewing science journals. Short conclusions from published papers were also very impressive: “However, if it is ultimately approved by the FDA it will be the only agent approved for this purpose, which is enough to make it a strong consideration for treatment. In addition to cost, clinical factors should be considered in the decision of which agent to try. For example, if the patient also suffers from depression, antidepressants could first be considered. On the other hand, if there is no evidence of depression or if TCAs and SSRIs are contraindicated or have not been effective, DM/Q will likely be a valuable alternative.” (

So, proposed drug is effective. What about safety?

Most active component of Zenvia is dextromethorphan (D). It is a component of the over-the-counter drug Mucinex DM (contains dextromethorphan Hbr 30 Mg).
Zenvia contains also 10-30 mg of Quinidine (Q). Quinidine is prescription drug (Tablets: 200, 300, and 324 mg). For adults range for quinidine gluconate is from 648 to 2592 mg/day. Quinidine preparations have been used for many years, but there are only sparse data from which to estimate the incidence of various adverse reactions. The adverse reactions most frequently reported have consistently been gastrointestinal, including diarrhea, nausea, vomiting, and heartburn/esophagitis.

Zenvia taken twice daily will give 60 mg dose of D or 1/3 from smallest quinidine tablet. It’s practically nothing.
So, it should be no problem with safety.

So, why last time Avanir received an approvable letter from the U.S. Food and Drug Administration for Zenvia? The communication from the FDA indicates that AVANIR's application is approvable, subject to the FDA and AVANIR reaching agreement on what additional safety and efficacy data will be required.
Honestly, I can't understand the part about safety. D is very safe (even for kids), Q most often side effect is diarrhea (24%).
Sometimes FDA is very hypercritical.

New data, including safety and tolerability data from the open-label extension as well as cardiac safety data from the double-blind phase of the Phase III confirmatory STAR trial evaluating the investigational drug Zenvia™ (dextromethorphan/quinidine) in the treatment of pseudobulbar affect (PBA) were presented in two posters at the American Academy of Neurology (AAN) Annual Meeting in Toronto, Canada. The new lower dose formulations of Zenvia have maintained statistically significant and clinically meaningful efficacy while providing an improved safety and tolerability profile relative to the original higher dose formulation.

Conclusions: the probability of Zenvia rejection is very low. I don’t know about possible Zenvia price. Both components are not expensive: price of 100 tablets of 200 mg Quinidine Sulfate is $18 (; price of 40 Mucinex DM tablets (Dextromethorphan Hbr 30 Mg In Each Tablet) is $11 ( It seems like that Zenvia should not be expensive drug. But PBA affects an estimated two million Americans with multiple sclerosis, Lou Gehrig's disease, stroke and other neurological diseases or trauma that can cause brain lesions. Currently no pharmacological agents specifically indicated for the treatment for PBA, antidepressants such as fluoxetine, citalopram, or amitriptyline have been prescribed with moderate efficacy. If approved, Zenvia will be prescribed to millions of PBA patients, may be for term of life.

Low rick, very high reward.

Disclosure: have AVNR in portfolio, will keep through PDUFA.

BIOD (short) continue

October 3th, 2010 by BiotechInvest

“The Biodel data does suggest that the India subgroup is different, and perhaps analyzing the data without this subgroup is appropriate, Specifically, HbA1C variability is more than double (0.99 versus 0.4 and 0.38) and the mean HbA1c measurements are larger by about 0.2-0.3 in the India subgroup. The increased variability and means in the India group will result in larger confidence interval which could account for the switch from concluding non-inferiority to inferior.”
Management at Biodel has offered a few explanations including mishandling of the blood samples used in the analysis and a poorly controlled patient population in terms of starting HbA1C concentration.

Recently I read very interesting discussion about Biodel India anomalous HbA1 results.
Author stated “that Biodel should stick to the heat exposure explanation and not suggest other explanations that call efficacy into doubt.”

I understand that main aim of this discussion is the attempt to convince the BIOD investors (long and potential) that FDA will buy any explanation of India samples anomaly and will exclude them from analysis. After this exclusion trial data will demonstrate non-inferiority (the goal of the study) over Humulin® in both type I and type 2 diabetics and VIAject will be approved.
I am not sure that FDA commissioners will do it.
All FDA commissioners are have a Doctoral level degree (M.D., D.O., D.V.M., D.D.S., D.P.M., Pharm.D., or Ph.D.). So, they will be very critical to any explanations.
OK. What kind of questions I will ask if I am FDA commissioner?
First one: Is it really that short time (day or less) blood samples incubation at India room temperature (30°C) will sharply increase HbA1c level?
All published scientific papers suggest that better keep samples at 4°C before analysis. But may be India is so poor country that lab technicians don’t have ice to keep blood samples in transit to a central laboratory. So, how many hours this transit took? To compromise samples it must took at least 24 hours at 30°C.
The measurements of HbA1 were conducting during last 2 decades, so temperature effect on sample instability was intensively studied. Early work abstract said: “At 30 degrees C, whole blood or erythrocytes from some donors are stable for one day, but after two days and seven days, results are frequently higher.” (PDF file of paper is here).
So, you can keep blood samples at 30°C but no more that 24 hours.

Well, FDA commissioner will ask: should I believe that blood samples were transported between labs more that 24 hours? Answer: I can’t buy it.

Another explanation of anomalous results “poorly controlled patient population in terms of starting HbA1C concentration. Biodel stated that the Indian population had HbA1C levels in the “in the nines” whereas the other patient populations were “in the sevens”. He was referring to the percent hemoglobin glycation.”
This explanation is more scientific. At 9 % of HbA1c estimated average glucose level is very high i.e. 212 (170–249) mg/dL. At 7 % of HbA1c glucose level is 154 (123–185) mg/dL. HbA1c ≥ 6.5% is level for the diagnosis of diabetes (glucose is > 140 mg/dL).
A high HbA1c represents poor glucose control. So, Europe groups were more healthy in term of diabetes (had more stable glycemic control before trial). And it’s really difficultly to decrease very high HbA1c level
Sure those diabetes patients in Europe before trial were continuously monitored with HbA1c values and these data were used in assessing glycemic control and their insulin regimens changed more often. May be in India diabetics were not aware of the hemoglobin A1c levels and relied on blood or urine glucose measurements to monitor treatment. Finally India patients had more advanced diabetes stages when it’s difficultly to control blood glucose level.

In principle FDA commissioners can buy this explanation.
Will it help Biodel to get an approval without additional efficacy trial? I don’t think so.
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