Poniard Hardly Alone

Endpoint Hit, Stock Walloped:Street, Media Miss the Point?By Randy Osborne

Editor

Last week, Wall Street slammed PoniardPharmaceuticals Inc. after the company disclosed apparent-ly good news: an endpoint met in the Phase II trial withpicoplatin in metastatic colorectal cancer. It was anythingbut the first time that the wider world reflexively failed – atleast from the company’s point of view – to understandand appreciate study data.

What’s a drug developer to do?South San Francisco-based Poniard wanted to show

that the regimen containing its platinum-basedchemotherapy could be given without the neuropathiesthat plague the standard of care chemo cocktail.

The results proved as much, but investors clippedPoniard’s shares by more than 25 percent, as skepticspicked over the data for possible clues regarding efficacy –and opined that the picoplatin regimen could be less thanimpressive, compared to what’s already out there.

At the American Society of Clinical Oncology’s 20 1 0Gastrointestinal Cancers Symposium, Poniard lifted the lidon final results from the Phase II trial, showing that thestudy had accomplished its main goal, proving thatpicoplatin in combination with 5-fluorouracil and leucov-orin (the FOLPI regimen) dropped neurotoxicity to a statis-tically significant degree (p <0.004) compared tooxaliplatin given as a combo with 5-fluorouracil and leu-covorin (FOLFOX).

In progression-free survival, the median was 6.8months in FOLPI patients and 7.0 months in FOLFOX(p=0.82, hazard ratio 0.95). In overall survival, the medi-

an was 1 3.6 months in FOLPI, 1 5.6 months in FOLFOX(p=0.53, HR 1 . 1 7).

At one year, the OS rate was 80 percent vs. 83 percent.Six-month and one-year survival reached 80 percent and52 percent in FOLPI-treated patients respectively, comparedwith 83 percent and 55 percent in FOLFOX. Poniard said theoutcome suggests similar efficacy between FOLPI and FOL-FOX, but the company didn’t go any farther than that.

Analysts pounced.Howard Liang at Leerink Swann conceded in a

research report that while the study was small and “clearly

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PublicOfferings

Public/Other*

PrivateBiotechs

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ions

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ACORDA REBUTS THE NAYSAYERS ........................................................2REPROS OPTIONS RUNNING OUT AS FDA GUIDES ON ANDROXAL ........3MONEY RAISED BY BIOTECH IN 2010 ..................................................4WEEK IN REVIEW................................................................................6WORD ON THE STREET, WEEK IN WASHINGTON ..................................7TOP 5 UNDERWRITERS: RANKED BY GROSS PROCEEDS ..........................8U.S. BIOTECH PUBLIC OFFERING PERFORMANCE BY UNDERWRITER........8

Jan. 1 – Jan. 28, 2010: $1,268.58M

Jan. 1 – Jan. 29, 2009: $554.19M

* Includes financings of public biotech firms with the exceptions ofpublic offerings and certain investments from corporate partners.

See Stock, page 4

Money Raised By Biotech In 2010 Vs. 2009

THIS WEEK INBIOWORLDINSIGHT

MONDAY

FEBRUARY 1, 2010

not conclusive, we believe [the readout] does increase therisk of a non-inferiority Phase III trial, as the HR is already out-side of the normal non-inferiority margin of 10–15 percent,and the upper bound of the 95 percent confidence intervalwould be even worse.” Poniard, with a cash clock that’sticking, “may not be able to survive” if the firm doesn’t finda partner soon, Liang wrote.

No fair, said Jerry McMahon, Poniard’s chairman andCEO. The Phase II study was not powered for efficacy, hepointed out; that’s the work of a larger Phase III effort, tobe funded (Poniard hopes) by the big-pharma player whoinks a deal based on picoplatin’s promise in CRC as wellas other cancers. Anyway, “the efficacy measures, allthree of them, indicated comparable efficacy” so far,though they need to be affirmed by more work, he toldBioWorld Insight.

Poniard, McMahon said, represents “a very compellingstory to partners,” even if “some of the analysts may havefelt the data in [CRC] were the only data that would allowthis drug to be useful.”

The main problem for Poniard – as for so manybiotechs now – is money. Net cash totaled about $20 mil-lion as of the end of the third quarter of last year, enoughto last into the first quarter of this year. There’s a commit-ted equity financing facility with Azimuth Opportunity

Ltd., but that limits draw-downs to 2.5 percentof the market cap and a share price of $3.Poniard was trading at below $2 last week.(See BioWorld Today, Aug. 21 , 2009.)

Hardly helping the partner hunt is thePhase III blowup last year of picoplatin in smallcell lung cancer – news that sent shares reel-ing by 76 percent. Poniard blamed the fizzle ofSPEAR (Study of Picoplatin Efficacy AfterRelapse) on an imbalance of third-line chemogiven to patients in the best supportive care armvs. the picoplatin arm, but the market didn’tseem to care about reasons. McMahon said theSPEAR results are still being discussed withthe FDA, and noted that Phase II data inprostate cancer are coming in March. (SeeBioWorld Today, Nov. 17, 2009.)

Whether any of this will be enough to savePoniard remains in question, though, andOppenheimer analyst Bret Holley predictedthe terms of any partnership the firm mightdraw “would likely be fairly modest.”

McMahon is keeping faith that a partnerwill know the difference between Wall Streetperceptions and reality, but the stock thump-ing taken by Poniard stands as a blot thatcould make suitors nervous. Among thosewho probably feel Poniard’s pain are officials

at Arena Pharmaceuticals Inc.Less than a year ago, after San Diego-based Arena’s

first Phase III trial with its obesity drug lorcaserin met allthree co-primary endpoints, the company watched itsshares plummet by 28 percent. (See BioWorld Today, March31 , 2009.)

Top-line data from the intent-to-treat population of the3, 182-patient BLOOM trial showed that lorcaserin patientslost an average of 12.7 pounds, or 5.8 percent of their bodyweight, while placebo patients lost an average of 4.7pounds, or 2.2 percent.

The difference between the two groups, 3.6 percent,wasn’t quite up to the 5 percent goal in the FDA guidelines,but lorcaserin fulfilled the other half of the agency’s edict,which wants the proportion of patients who lose 5 percentof their weight on drug to be roughly double that on place-bo. In BLOOM, 47.5 percent of lorcaserin patients lost morethan 5 percent of their weight, compared to 20.3 percentof placebo patients. The news in that department got evenbetter: 22.6 percent of lorcaserin patients lost more than1 0 percent of their weight, compared to 7.7 percent ofplacebo patients.

Wall Street only sniffed, and punished Arena accordingly.By the time lorcaserin’s second Phase III trial, called

BLOSSOM, came around, the company was educatingobservers ahead of data disclosure regarding endpoints

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Money Raised By Biotech in 2010: Jan. 1 - Jan. 28, 2010

Public Offerings 39% ($499M)

Public/Other 19% ($236M)

Private Biotechs 42% ($533M)

19%($236M)

39%($499M)

42%($533M)

StockContinued from page 1

See Stock, page 5

and their meaning. This worked out better, though thevalue of the results took a while to soak in. (See BioWorldToday , Sept. 21 , 2009.)

BLOSSOM hit – albeit just barely – the FDA’s 5-per-cent-weight-loss efficacy benchmark.Just as important, lorcaserin proved sat-isfyingly safe, a factor in potential pre-scr ipt ions that some investors maypreviously have given short shrift. Theobesity market is crowded, but Arenahas reasonable cause to stay optimisticabout lorcaserin, a 5-HT2c serotoninreceptor agonist, replacing the approvedphentermine, beset by side effects. (SeeBioWorld Today , Sept. 1 0, 2009.)

Another notable historic casualty inthe battle for comprehension: AnadysPharmaceuticals Inc. ’s non-nucleoside polymeraseinhibitor ANA598, for which the company unveiled fatefuldata in the spring of last year. Shares in San Diego-basedAnadys plunged 40 percent that day, as investors appar-ently mixed up results from one trial with another – andran away fast. (See BioWorld Today , April 24, 2009.)

The nosedive happened just a few months after inter-im data from a Phase Ib study of ANA598 for treatment-naïve hepatitis C virus patients sent Anadys’ stock soaring1 1 5 percent and prompted analysts to call the drug apotential “best-in-class.” (See BioWorld Today , Jan. 9, 2009.)

Full, carefully detailed data from the randomized, double-blind, placebo-controlled, multiple ascending dose trialoffered at EASL continued to show strong efficacy, and thedrug was well tolerated in the Phase Ib trial with no serious

adverse events. But Anadys also disclosed that three out of24 patients treated in a 1 4-day healthy volunteer studydeveloped a Grade 2 rash and discontinued treatment.

That’s what sparked the crash, although in this case,some analysts tried to hold the boat steady. Phil Nadeauof Cowen & Co. wrote in a research note that a “1 2.5 per-

cent rate of rash in two weeks of dosing isworrisome,” but called the sell-off an“overinterpretation.”

Gil Bashe, with the public relationsfirm Makovsky + Co. in New York, said theproblems that beset Poniard, Arena andAnadys are far from uncommon.

“We’re dealing in an area where the‘tweet’ is more powerful than the read,”he said, blaming opinion-based report-ing on the blog style of writing, coupledwith the haste to get news published onthe Internet.

In Wall Street sell-offs prompted by quick, shallownews reports, “we’re really dealing with managing riskmore than understanding science,” Bashe told BioWorldInsight . “People are making determinations of how do Iflip this stock quickly, in order not to take any risk?” In thecase of Poniard and others, “it’s not a reaction to the data,”he said. “It’s a reaction to many factors in the market atthat moment, and a lack of understanding of what thedata mean.”

Analysts become part of the problem, Bashe said,because they, too, are under pressure to issue reportsquickly. “The analysts become part of the story” immedi-ately, since they – rather than, for example, trial investiga-tors – are quoted by reporters in stories that are puttogether to meet ever-tightening deadlines.

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StockContinued from page 4

“People are making determi-nations of how do I flip thisstock quickly, in order not totake any risk? . . . it’s not areaction to the data. It’s areaction to many factors inthe market at that moment,and a lack of understandingof what the data mean .”

–Gil Bashe, Makovsky + Co.

One issue Acorda does not deny, however, is the exis-tence of an Ampyra patent cliff. The drug’s patents expirein 20 1 3, but orphan drug exclusivity will cover the com-pound until 20 1 7. Additionally, Acorda is working on a

patent filing that could extend coverage to 2018.What happens then? Acorda has three programs in pre-

clinical, but the company is actively seeking assets to fillits pipeline gap. Macdonald said small molecules or largemolecules in Phase II or Phase III for neurology indicationsare the top in-licensing priority.

AcordaContinued from page 2

‘All My Clones’: BioWorld’s Biotech-Themed Soap OperaPrada-wearing investment banker Odessa shook things up at a luncheon for the New York Biotechnology

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Meanwhile, in California, Cappuccino Pharmaceuticals’ Rupert Madasheck meets the mysterious Vivian. Will herVarpaWare technology still be able to help his fledgling firm after he learns she’s his long-lostdaughter?

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