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“This Tiny, Unknown Biotech is About to Unleash Its ‘Holy Grail’ Drug”

Biotech Supertrader teases that "This May be the Most Radical Advance in Medicine in the Last 100 Years"

By Travis Johnson, Stock Gumshoe, January 8, 2014

Robert Morris is helming a biotech-focused stock newsletter that’s called Biotech Supertrader (modesty has no place in the world of newsletter promotions, of course), and I’ve never covered this letter before so I thought I ought to have a look at the latest teaser we’ve been asked about.

Morris, incidentally, has been featured in our pages before — but that was back when he was editor of China Stock Insider at the same publisher. That letter, like almost all China-focused investment newsletters, seems to have disappeared quietly into that good night … which probably tells you that it’s time to invest in China again, since the newsletter publishers are ignoring the Middle Kingdom and rushing out their pitches about biotech and tech stocks. At the time, Morris was teasing NQ Mobile (NQ), which has turned out to be pretty good if you bought it down there in the $6-8 neighborhood (though it’s been a wild ride).

So now what’s he pitching for his Biotech Supertrader?

Well, the destruction of “Man’s deadliest disease”, of course. Here’s how the teaser gets our attention:

“This Tiny, Unknown Biotech is About to Unleash Its ‘Holy Grail’ Drug on Man’s Deadliest Disease

“Their ‘Guided Missile Approach’ Could Save Thousands of Lives Each Year

“It’s about to become the most talked about advancement in cancer treatment in our lifetimes and you can lock in a life-transforming fortune if you act quickly….

“I’m urging my subscribers to load up on this stock NOW….

“I’ve just uncovered a tiny, unknown biotechnology company with a new cancer drug in phase 3 clinical trials which is showing remarkable success at treating several types of cancer.

“Their scientists have found an innovative approach to cancer care which involves a breakthrough in treatment. It goes deep inside the inner workings of our cells.

“Plus, this medicine looks to be many times more effective and with fewer side effects than the chemo, radiation, and drug therapies currently available.”

If there’s one thing that investors know can make them rich and make them feel good about themselves and the world, it’s a cure for cancer — we’ve seen that effective cancer treatments can and do (occasionally) turn little biotech stocks into gigantic successes, so the dream lives on that you’re going to catch one of these lottery tickets and own the next Genentech. Will we be so lucky? Well, let’s see which one he’s pitching:

“When this drug wins FDA approval – which I believe it will – this small company’s $4.16 stock price will go straight to the moon.

“And the market for this drug is absolutely huge!

“You see, this small biotech is targeting its new drug, let’s call it ‘drug S’, at cancers of the blood and bone marrow. And it is already in very promising phase 3 trials for these two types of cancer.

“But here’s where it gets really interesting. It looks like the drug this company is developing will also work on other types of cancer!

“There are positive signs it works on Non-Small Cell Lung Cancer (NSCLC) too. There are 1.1 million people with this type of malignancy. Just in the United States alone there are over 300,000 patients with this disease according to The American Cancer Society. Each desperate for a cure.

“Plus it looks like ‘drug S’ may turn out to be an effective treatment for ovarian Cancer. There are more than 204,000 new cases of ovarian cancer diagnosed worldwide each year with 22,280 of these in the United States according to the National Cancer Institute estimates.”

So … who is it? Thinkolator sez this is Cyclacel Pharmaceuticals (CYCC)

Cyclacel is indeed a little biotech around $4 (it closed at $4.35 yesterday), with a market capitalization of only about $80 million — so be careful, we’re a big enough group here that if just a small percentage of Stock Gumshoe readers got enthused about this stock it could drive the shares up, less than a million dollars worth of shares trade each day (Biotech Supertrader says they limited their readership to 750 people — I don’t know if that’s still their cap or if they’ve hit it, but we’ll have more folks than that reading this free article).

And like many biotech stocks, it’s got some impressive scientists and it’s been losing money for a long time as they’ve been searching for a viable drug (their current lead drug also was a big focus of theirs back when it was in Phase 1 trials five or more years ago, so that’s a good reminder of the time these things take, it’s just starting Phase 3 trials now). It looks like they must have gone public in 2004, when they were about eight years old, and a quick scan of ten years of their financials over at Morningstar indicates that they’ve never generated more than a token amount of revenue (meaning, they’ve probably had some research collaboration payments or partnership funding, but never got a product to market), and have accumulated more than $250 million in losses to date. And had two reverse splits to keep the price from sinking far into penny territory.

So that’s not unusual, but it means that — as with all developmental-stage biotechs — it’s not about the financials or the fundamentals, it’s about what’s going to happen in their clinical trials and whether things are going well enough that they can continue to finance the trials … which get much more expensive as you progress through Phase 2 and Phase 3.

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All I know about them so far is that they say they’ve got enough cash to get through enrollment in their key Phase 3 study for “drug S” (which is sapacitabine) as of September when they last updated their investor presentation, but I know nothing about the science or the competing cancer drugs that are out there or how fabulous this particular one might be, so I asked our favorite medical writer, Doc Gumshoe (who, yes, is not a doctor) to check them out quickly and chime in. Here’s what he could share after looking into them for a few minutes (he’s just looking at the medical stuff, not so much the “investor presentations”):

    Cyclacel’s Prospects

    Cyclacel has three drugs in development at this time, and is involved in eight clinical trials with these drugs, not including two clinical trials that have been terminated. Their top contender is sapacitabine which targets the division of cancer cells. If you can prevent cancer cells from dividing and reproducing, you have the cancer whipped, so targeting cancer cell division (or mitosis, which is the technical term) is a highly promising avenue for treating cancer. However, we need to take note of the fact that sapacitabine is one of a large number of drugs that propose to fight cancer by this method.

    At present, all eight of Cyclacel’s clinical trials involve sapacitabine. Of these, at least one has been completed – a Phase 1 study of the safety and pharmacology of the drug. Four others are current, with no information about results. These are likely Phase 1 or small Phase 2 studies, to assess safety, determine what a correct dose might be, and evaluate whether the drug does what it’s supposed to do in human subjects with the target diseases, which in this case include acute myeloid leukemia (AML), cutaneous T-cell lymphoma, and some advanced solid tumors. Prior to the clinical trials, sapacitabine has demonstrated impressive results in delaying the spread of metastatic liver cancers in mice.

    From what I can gather from public sources (i.e., the NIH Clinical Trials Registry), there is one Phase 3 trial, which started recruiting patients in February of 2013 and is expected to be completed in late 2015. The trial is in elderly patients with AML, and compares alternating cycles of sapacitabine and decitabine with decitabine alone. Decitabine (Dacogen) is FDA-approved for treating AML and also targets cancer cells’ replication by attacking their DNA.

    It is possible that the Phase 3 trial by itself could lead to FDA approval for sapacitabine, depending on the strength of the results. However, that trial would not get the drug approved for use as monotherapy, since it is not being investigated as monotherapy. My guess is that Cyclacel is planning more trials of sapacitabine as monotherapy, perhaps in younger patients. And my further guess is that FDA approval is still quite a long way off.

    Sapacitabine is also in a Phase 3 trial with cyclophosphamide and rituximab for the treatment of relapsed chronic lymphocytic leukemia. Cyclophosphamide (marketed under several trade names) is a well-established chemotherapy agent used in a number of cancers, and has led to remission in many cases; however, it is associated with truly harrowing adverse effects. Rituximab (Rituxan, Genentech) is used not only in cancers but in some autoimmune diseases. And sapacitabine is also being studied in patients with previously-treated non-small-cell lung cancers.

    Although the piece from Biotech Supertrader said that the drug – identified as “drug S” –is also a promising treatment for ovarian cancer, I find no clue that it is being studied in such patients. [ed note: that’s because that “promise” is in the lab still, not in people — they had a press release about this in the Fall, “75% of Ovarian Cancer Patient Samples Highly Sensitive to Sapacitabine”, not studied in patients but on patient samples]

    Cyclacel has two other drugs in development: selicilib and a drug designated as CYC116. One selicilib study has been terminated, and in a second Phase 1 study, selicilib is used with sapacitabine in patients with advanced solid tumors. Remember, however, that Phase 1 studies are many rungs of the ladder below what’s needed to gain FDA approval.

    CYC116 is an aurora kinase inhibitor, meaning that it blocks the action of an intracellular enzyme that facilitates cancer cell mitosis. This is a promising avenue of cancer treatment, however, the traffic on this avenue is fairly heavy, and includes several other classes of drugs including tyrosine kinase inhibitors, and taxol based agents such as paclitaxel (Taxol, Bristol Myers Squibb); docetaxel (Taxotere, Sanofi-Aventis), Abraxane (a newer formulation of paclitaxel from Celgene) and others.

    CYC116 supposedly also inhibits vascular endothelial growth factor (VEGF), which induces the growth of blood vessels that nourish cancer cells. Inhibiting VEGF is a well-established means of combating cancer, and CYC116 could hardly be characterized as a radically new departure in cancer treatment.

    The one trial involving this agent has been terminated. That, of course, does not mean that development of CYC116 stops dead in its tracks – there are many reasons why a trial can be terminated, and ours is not to speculate without more information.

    Beyond those three drugs, it’s hard to guess what Cyclacel may have up its corporate sleeve. It is certainly true that a successful cancer drug – even if only moderately successful– can be transformational for the biotech that develops the drug. But the drugs that Cyclacel has under development do not appear to this skeptical observer to be radically new departures in cancer treatment.

    It’s important to remember, when trying to estimate the likelihood of a single drug demonstrating sufficient efficacy and safety to gain FDA approval and market share, that the competitive field is vast. As I mentioned earlier, Cyclacel has a total of 8 clinical trials in process at this time.

    For the sake of perspective, it’s worth knowing that at present there are 41,445 cancer trials being conducted. So those are the odds.

So there you have it — it’s almost impossible to find a development-stage biotech whose financials look great or that makes your heart go pit-a-pat over their valuation, especially in a biotech bull market like we’ve seen over the past year or so, and Cyclacel doesn’t jump out as spectacular on that front either, not unless you’re a big believer in the promise of their specific drug. They’re a small stock and they don’t get much attention, other than from the analysts who probably helped them sell shares in secondary offerings in recent years, and there aren’t any major “skin in the game” insiders as far as I can tell (the CEO owns $1 million worth of shares, but he gets paid more than that every year), and there’s only one really focused owner on the institutional side that seems to have any kind of biotech focus (Eastern Capital owns about 7% of the shares, roughly $5 million worth … don’t know much about them).

So I don’t see a lot to make them stand out other than Robert Morris’ apparent enthusiasm for the shares (which certainly goes over the top, he calls his special report “The End of Cancer Worries Forever“), and I don’t know enough about the science to be a believer (though, to be fair, I almost never speculate on developmental biotechs because they’re so hit-driven and I’m not smart enough to be a hit-picker in the sector). It is at least encouraging that they are enrolling patients for Phase 3, and that they probably won’t have to raise more money before they have some indication of how the trial is going, but sometime in the next year or two they’re probably going to have to either get good results from this trial that let them raise cash at a good price, or have promising enough results that some big pharma company wants to jump in and help fund development of “drug S” (or just buy up the whole company, as happens with some regularity when a little biotech gets promising results).

Oh, and they are presenting at an investor conference next week, so maybe they’ll have something interesting to share then. As you can tell, this one doesn’t jump into my cup of tea … but these kinds of stocks almost never do. Sound interesting to you? Interested in the science or the lottery-ticket possibilities of $80-million developmental biotechs? Have any experience with Robert Morris or know whether or not we should consider him a biotech savant? Let us know with a comment below.

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Steve
January 19, 2014 12:24 am

Thank you karmaswimswami.
Very eyeopening!

karmaswimswami
January 21, 2014 4:08 pm
Reply to  Steve

Thanks Steve. You are most welcome.

Mark Mose
Guest
Mark Mose
January 19, 2014 1:15 am

Some of these Aussie BioTechs have doubled in price on the ASX since November.
Patrys (ASX:PAB)
Benitec (ASX:BLT)
Prana (ASX:PBT)
Also in Australia, AntiSense Therapeutics (ASX:ANP) with their licensed technolology from Isis Pharmaceuticals is moving forward with their programs, ATL1103 seems to have recorded significant suppression of hepatic target mRNA, phase II clinical trial. Looks like an interesting company, maybe worth doing some research on.

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karmaswimswami
January 21, 2014 4:11 pm
Reply to  Mark Mose

Mark: Thanks. I will look into ANP. Prana is worthy of consideration because of some good phase II data today.

Patrys we have mentioned before. Going after GRP78 is good. But I have been expecting a press release about that their anti-GRP78 mIgM showed against liquid tumors at Am. Soc Hematology in December and there seems to be no word about it. The data may not have been good. But absence of evidence is not evidence of absence.

Jim t.
Jim t.
January 19, 2014 1:22 am

I have been investing in biotech for about 16 years. Had some nice wins and some ‘others’ as well. I read a lot and agree with swami that complicated science can be explained to open minds when the explainer truly understands and then makes the effort to find a connection that the audience can process. Chemistry, in particular, can best be explained anthropomorphically. Magnets and paper clips are great tools. Anyway, what I mean to say is that it is rare in a public forum to be both entertained and enlightened. Thank you, Doctor kss.

karmaswimswami
January 21, 2014 4:12 pm
Reply to  Jim t.

Thanks Jim I intend to keep at it.

geoko
geoko
January 19, 2014 1:26 am

Wow, just finished this loong and worthwhile discussion. Hope to hear more from these well-informed Irregulars. Thanks to all!

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coffee
coffee
January 19, 2014 1:44 am

Many thanks to all for this thread, especially karmaswimswami. This is a stunning read, although I am going to need to go back over it several times to let more and more of it sink in.

I tend to steer clear of Biotechs, but I am tempted to have a little punt on BLT.

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Vortex
Member
Vortex
January 19, 2014 2:49 am

Very nice discussion.

Frenchy
Frenchy
January 19, 2014 6:40 am

Hello All,
I am in the same boat as Luis as far as getting the email thread. I had put in a buy order for Binetec back on Jan 9th at the onset of this article but it never went through and forgot about it as I am rather busy in Afghanistan. Thank you for this intelligent and very insightful thread.

KarmaSS: I’m in on your $49 newsletter unless Gumshoe will decipher your teases free for us…lol!

techscan
Irregular
techscan
January 19, 2014 7:30 pm
Reply to  Frenchy

Frenchy: Only very, very small volume offered so it may take a while to get shares. Fidelity charged me $50 for the trade! They say it had to be executed on a ‘foreign’ platform.

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herbalix
Member
January 21, 2014 8:39 am
Reply to  techscan

Hi Louis and everyone else,
Best way to trade in foreign stocks is ‘Interactive Brokers’, as far as I know. I paid $6 for a trade in Australia just yesterday. None of this nonsense about trading on a foreign platform. Thanks to everyone for their input. Great learning experience for me!!!

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Alan Harris
Guest
Alan Harris
January 19, 2014 7:08 am

I awoke to 16 ‘reply’ notifications today !!!. This thread is snowballing and morphing from investment advice thru biotec research to the Doctors surgery.
Swammi, I suspect theres an endless queue of ill people out there who have become interested in biotec investing by researching a cure for their own condition. I hope you realise what a Pandora’s box you have opened. How are you getting any work/reading done? Did you ever see The Life of Brian?

Ps Anyone know a good biotec ETF/fund?

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Steve
January 19, 2014 9:24 pm
Reply to  Alan Harris

The best performing Biotec fund is BIPIX. BUT, past performance is no guarantee of future success and the stocks it holds have ALREADY had fantastic runs. Over 20% of BIPIX is in AMGEN and GILD, and it also owns some BIIB, REGN, CELG, MDVN, VRTX, ALXN, BMRN, LIFE, ILMN and PCYC. I recently sold BIPIX to buy PCYC whose Ibrutinib (partner with J & J) was approved for MCL (smaller market) on November 14, 2013, and which has a 2/28/14 FDA deadline for Ibrutinib to be approved for CLL, which should push it up from $140 to $150.

KARMAS: Do you think that I can wait until 2/28/14 to sell PCYC and buy some Benitec and/or RNN, or are Benitec and/or RNN poised for some news/move before 2/28/14.

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karmaswimswami
January 21, 2014 4:16 pm
Reply to  Steve

Hi Steve: I do think you can wait a bit on RNN. Great company, and one I am long on, but it may sit at $1 for a while. Hard to know about BNIKF. Obviously there has been huge price action today. That may have owed to pent up post-holiday buying. BLT was down on the ASX last night, but BNIKF set a new high today in very very heavy volume. By technical analsysis it is in overbought territory, so I would let it settle before getting in. It of course is way up since I first mentioned here in September.

karmaswimswami
January 19, 2014 12:18 pm

It’s quite gratifying that so many people are reading and posting. I am grateful and humbled. This has become a stellar discussion because I am being introduced to new companies and being given a reason to keep up with other ones.

We have talked about Santaris, Regulus, Benitec, and Gilead. I wonder if a digression about hepatitis C might be worthwhile? My Australian colleague and I have said, only half-joking, for years that there should be an HCV ETF. HCV has raised the bar for biomedical research even beyond where HIV took it. Curing it is the hottest topic in biotech today. But why? Why is it such an issue? Why is it so hard to cure? Since no more than a fourth of people with HCV progress to cirrhosis, why is everyone so up in arms about it? Is there really so much of it out there as to constitute a crisis, an epidemic? Do you need to have some skin in the game as regards investing in HCV treatment?

HCV is a very big deal indeed. It is six times more prevalent than HIV. (And about a sixth as prevalent as type II diabetes). While the incidence, the number of new cases per year, is low (really finite only among illicit drug users and MSM’s with unprotected practices), the prevalence in the US is about 2% of people, BUT only a fourth of those people have been diagnosed. The world’s highest prevalence is in Egypt: 22 per cent. This was a result of a bungled, inane campaign by its government years ago to eradicate schistosomiasis. Children were summoned by megaphone to schoolyards where health officials went from arm to arm injecting tartrate of antimony….and never switching needles. 5 million Russians are infected, mostly with genotype 1b (81 per cent).

In the early days of the epidemic, I was a young faculty hepatologist at an American institution I am sure you have heard of. I was seeing newly diagnosed cases every day of every week, and teeing everybody up for treatment with interferon-alfa and ribavirin. Tension began to emerge between me and a senior hepatologist who had been at that institution since the lava began to cool. Why was I treating everybody? He was seeing just as many HCV patients as me, but was only treating a fourth to a third of his. He began making snarky remarks about me to others any time he was on call and a patient of mine had to be admitted, for example, for a transfusion for anemia caused by ribavirin (which happens to most of them, frankly).

He thought I was nuts for treating everybody. I thought he was nuts for not treating everybody. I began to build a strong academic case that it is impossible to have HCV and be well. That quality of life suffers even more than it does in HIV. Remember the aches and fevers of having the flu? That is because during the flu, your body pumps out interferon to fight it. HCV causes the same thing, but doesn’t go away. With it, you go around in a fog of body aches, muscles aches, depression and a general sense of ailing. The very first patient with HCV I ever had was a great guy named MJ (he died last year). MJ had a stone-cold normal liver by biopsy. He developed essential mixed cryoglobulinemia from HCV, however, and it took out his kidneys. He went through two kidney transplants, I treated him three times for HCV, upping the ante each time, but could not eradicate virus (doing so is nearly impossible with the regimens of the day in EMC). MJ died because the EMC and the immunosuppressive drugs post-kidney transplant both caused him to get lymphoma. I noticed EMC was happening to a lot of patients. I documented a highly weird case of primary central nervous system lymphoma owing to HCV, odd because the brain is a “privileged” place as regards such an illness. Increasingly, my senior colleague and I were at odds. I stopped doing liver biopsies because my contention was that doing so was silly because I would never use biopsy data to argue a patient DIDN’T need HCV treatment. The workplace strife began to wear on me, and I left.

Which of us has been proven right by science? Well, it wasn’t him. He parked thousands of patients and didn’t treat them, and sat idly by while they developed non-Hodgkin lymphoma from HCV, while they got Waldenstrom macroglobulinemia from it, while they got depressed from it and lost their jobs and insurance. He let their kidneys fail. He let them get porphyria cutanea tarda from it, and corneal ulcers. He let them give it to others. Meanwhile, for me, the only reason not to treat was if they had a contraindication to treatment. The treatment was hellish, but mostly folks got cured, and say they feel enormously better. HCV is now a recognized carcinogen, and failure to treat it is considered a litigable offense by a physician, a violation of standard of care. All insurance companies insist that all patients with it be treated, regardless of liver biopsy. In fact, CMS no longer considers liver biopsy to be needed and justifiable as part of the HCV work-up, and is reluctant to pay for it.

HCV is felt to be such a public health problem in the US that last summer the CDC issued an edict that all people born between 1945 and 1965 be screened for it, regardless of risks or history. That is because 97 per cent of the cases are found in people in that age range. It’s a lot of people. It’s passed many ways, not just by contaminated blood or blood products. Veterans are at risk because of the pneumatic vaccine dosers used on them. If you did a line of cocaine just once and shared a straw or dollar bill, you may have it. It CAN be passed sexually, but the fact is that if you are heterosexual and practicing intimacy in a usual and customary way for Western societies (use your imagination) it virtually never is passed. If you follow 10,000 sexually active heterosexual couples for one year where one partner has HCV and the other doesn’t, there is a 99.7 per cent chance that none of the uninfected partners will convert. The event rate is so low, it is difficult to measure. Tattooing, especially with red ink, is a colossal risk factor. Manicures and dialysis are risks, I know of one awful instance in which I scoped a patient. When I introduced a biopsy forceps into the channel of the scope, blood from a prior patient sluiced out. That patient got acute HCV and died from it before an organ could be found. I very much lost my cool because that scope had been “cleaned” (ie, not cleaned correctly) by a tech known to be a drunken idiot, and I insisted she be fired.

Why is it so hard to cure? Why does it evade the immune system? Imagine it is Belgium, in medieval times before invention of the printing press. There are Trappist monks in a scriptorium who sit at desks all day and copy the Bible onto parchment scrolls. But the water supply is dodgy, so the Trappist monks drink frambois Lambic to quench their thirst. As a result, on each line they copy, they make an error of one letter. Their copy gets passed to another monk to make another copy. But he is slightly tipsy too, and makes a one-letter error on each line. With a million or two iterations of this process, the manuscripts cease to make sense. They do not read like the Bible anymore.

So it is with hepatitis C. Its ability to proofread copies of itself that it makes is lousy. There is crummy transcriptional fidelity. The more copies of itself it makes, the more bogus RNA nucleotide substitutions happen, and soon the capsid protein structure skates away from what it once was. It makes quasi-species of itself, and thus constantly slides out from under control by the immune system.

Will we ever be able to vaccinate it against it? Probably not. If you have HCV, get treated for it and cured, you have absolutely zero protection against repeat infection (just ask a few of my patients….ones I got off drugs, cured, and then thought they had carte blanche to go back to shooting heroin or snorting cocaine. I have had lots of people come right back in feeling sick, and infected all over again with a different genotype). There is a good rule of thumb in medicine: the efficacy of a vaccine can be expected to be the same as the efficacy of the native immune response in getting rid of a virus. For example, with hepatitis B, natural immunity clears it 85% of the time. And HBV vaccine is 85% effective in preventing infection. (The Gardasil vaccine confers high protection against HPV, parallel to the natural rate at which the immune system clears this….but I can tell you that Gardasil is a waste of money and to be avoided. More on that at some point.)This is why I will never invest in a company whose main thrust is developing an HIV vaccine (though clearly HIV can be cured….more about that sometime). In fact, about 22 per cent of people who get HCV will eradicate it naturally: usually young people with strong immune systems who get infected with virus that has not undergone much quasispecies divergence. They get an acute, jaundicing HCV and generally kick it. Most people, however, get no such illness, and the disease becomes chronic.

The old regimens for treating HCV were really pretty awful. I once had a lovely patient who lived alone near Florida swamps. She had EMC from HCV and was dying from it. We talked and talked and I worked her up consummately. I decided to put her on interferon-alfa with ribavirin. She flew home and started the regimen. Her outcome was so bad that even now, 15 years later, it makes me cry. She got a friend to come stay with her for the first IFN shot, as I suggested. Two hours after the shot, she spiked a fever. Although she had never had seizures before (believe me, I had asked…it’s a contraindication), she began seizing and would not stop. Status epilepticus. The friend called 911. By the time EMS arrived, she was cyanotic from seizing and aspiration. They intubated her in the field, or tried. In fact, they shoved the endotracheal tube into her esophagus. They fiercely bag-ventilated her, and this perfed her esophagus and filled her abdomen up with free air. That air entered her bloodstream and caused air embolism. A huge air embolism went to the occipital lobe of her brain, and as a result she is blind now. From one dose of interferon-alfa.

A lot of anecdotes, I admit, but I hope you can see why it’s an issue, why better treatments have been needed, why the stakes are high. I’ll post at some point about the current new regimens, who is making and marketing what, and what treatment will soon look like.

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myles
January 19, 2014 10:24 pm
Reply to  karmaswimswami

Thank YOU Dr. Karmasswimsuami! Let me join the list of countless others that have voiced their thanks to you for sharing your wisdom not simply on investing but on life. Your comments about hepatitis C have moved my heart because they strike so close to home. My wife contracted hepatitis C through a blood transfusion while giving birth to our child. The experimental treatment at that time was the interferon & ribavirin combination…needless to say it was very painful to watch what she had to go through. PTL those day are long over and she is doing tremendous. Life is far more valuable than any financial investment! But what if we can change our the quality of a life through a financial investment. So after my wife came through her treatments I started looking for companies doing research on Hepatitis C…to find a company with a treatment which would be easier on the patient. Investing with your heart may not always be wise but my purpose was far greater than my wallet. At that time there were not a lot of companies doing research but I stumbled across SCLN. Your comments on BNIKF have stirred my heart to a company that seems to have more promise and potential than SCLN. Am I correct? Your wisdom is appreciated but your caring is AMAZING!

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karmaswimswami
January 21, 2014 4:20 pm
Reply to  myles

Thanks Myles! Very kind of you. I saw your reply the other day, and am just now catching up with answers. i am definitely thrilled that your wife is SVR as regards HCV. Suffering through the rx was the right thing to do, but you see how hard it was. I hope that the child was not infected. RIsk of pregnant mothers passing it to infants at birth is small but not zero. Anyway, the brutarian treatments are of the past now. I would politely suggest not holding on to SCLN. Slam dunk 12 week therapies that cure essentially all are at hand. Their main issue is wallet toxicity. So the HCV pharma game is still open: it will go to companies that can treat it cheaply and quickly, and beat Gilead’s $180,000 anticipated price tag for sofosbuvir/ledipasvir.

HarleyDLS
March 13, 2014 1:01 pm
Reply to  karmaswimswami

Dr. KSS, thank you for sharing your wisdom which is obviously great. The companies mentioned on this post have given me many ideas for further research and possible investment opportunities, particularly Benetic and Rexahn. But my interest goes far beyond that as I am an HCV patient and I too, hope for a better cure than the Interferon alpha plus Ribavirin which is currently the recommended standard of care (usually with one of the two new drugs, Incivek and Victrelis, added for better treatment outcome). I do respectfully take issue with your statement that everyone who has this virus get treated as the treatment itself has some risk, as I am sure you know as you described some bad outcomes you witnessed. The last I checked, the NIH recommends watchful waiting as a reasonable course of treatment in patients like me, who do not suffer major effects from the infection and who do not develop complications or experience measurable progression of steatosis. Especially those who have certain risk factors such as clinical depression and other manageable psychological disorders are warned of suicidal and homicidal risks due to side effects of the standard treatment.

The current standard regimen is horrible for many patients. I know because I tried it as soon as I heard that Incivek was available as a co-treatment with the Interferon alpha and Ribavirin, as I knew the clear rates were much better with the combo. The HCV virus cleared my system almost immediately but the side effects were intolerable. There is also anecdotal evidence that some patients remain in the drug induced “fog” that the interferon alpha is famous for precipitating for months after treatment stop. That was a great concern for me. The physician who has been treating me agreed that watchful waiting is a fine option for me even though there is risk attached to it. I have a complete blood workup and abdominal ultrasound twice a year and have, to date, developed no complications from this strategy.

My Hepatologist recently left his practice to head up a teaching hospital department in another state so I will have a new physician affiliated with Georgetown Hospital in DC when I do my next visit in April. I am looking forward to meeting him and seeing if the recently approved drugs, Olysio and Solvadi can be taken without interferon alpha. My understanding is that they are only approved for combination therapy. What is your read on this? Are the new drugs effective without combining them with interferon alpha? If not, how far away from this realization with drugs under clinical trial are we?

One other question based on your position that no treatment (given low risk factors to treatment) is not a good option. Most physicians I have seen are big on treatment and obviously you and they see all the bad things that can happen, when patients who are untreated suffer complications and progress. I suppose if I saw that everyday, I would be more motivated to get treated as well. There is a part of me that thinks some treatments that physicians perform are not necessary and that there is a need to “try” something medical to avoid legal repercussions should the patient progress and then sue saying they weren’t aggressively advised to seek treatment. I supposed that is balanced by the risk of treating and then having a bad outcome which provokes a lawsuit. But, I also think most doctors do not like sitting on your hands doing nothing when they see people cured everyday. My question is then, is there no room in your recommendations for watchful waiting as an appropriate treatment plan for some patients?

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Gabgigor
Gabgigor
January 19, 2014 12:35 pm

Very enlightening discussion !
Enjoyed every bit of it.

Vijay
January 19, 2014 1:42 pm

Alan, check out BIB & FBIOX.

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Alan Harris
Guest
Alan Harris
January 19, 2014 6:58 pm
Reply to  Vijay

Thanx. but whats youre reasoning? people?…past success?…or just tickers? Not meanng to be rude, but tickers are just tickers without justification.

Vijay
January 19, 2014 8:01 pm
Reply to  Alan Harris

past success.

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Alan Harris
Guest
Alan Harris
January 20, 2014 4:52 am
Reply to  Vijay

Ok…and my apologies if I sounded rude.

Leo S
Leo S
January 19, 2014 2:13 pm

Karma, words cannot describe what I feel about the extensive and unselfish time you have put into this thread. We are all blessed by your attitude, which compared to some others in the medical field brings tears to my eyes. Data is truly what it is about. Thank you.

gummydave
gummydave
January 19, 2014 2:41 pm

Just to add my note of thanks to Doc Karma. Not only do you provide outstanding education and advice, you also sound like an excellent caring doctor.
Today is the third year anniversary of my wife’s diagnosis with Inflammatory Breast Cancer, which as you would know, is a relatively rare and aggressive form that often occurs in younger women. (She was only 41 at the time.) Thanks to great medical care, and (presumably) some of the latest drug developments, however, she survived and is active and healthy. It’s so encouraging to hear about all the research and new treatments in the pipeline that we may have need of one day.
Long may we have the benefit of your input on these boards

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karmaswimswami
January 21, 2014 4:25 pm
Reply to  gummydave

Thanks gummydave. I really appreciate it. I am thrilled that we are all having such a good conversation about such a cool topic.

Inflammatory breast cancer is a REALLY bad thing, very rare, very unlucky for your wife. Sorry to hear it. I do hope she is a long-term cure. 10-15 years is the surveillance window, as you know. The dictum has sometimes been than inflammatory breast cancer is SO virulent that, paradoxically, it can be one that responds most beautifully to chemotherapy. The more rambunctiously replicating the tumor type is, the more sensitive it is to be snuffed out. Anyway, hope that is the case with hers and that has made a permanent exit.

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1paglee
1paglee
January 19, 2014 2:46 pm

Karmi, I have been following this thread with much fascination! It’s interesting to learn about fellow-investors’ and fellow prostate-cancer survivors. The radioactive palladium brachytherapy “seeds” that were shot into my prostate 6 years ago have helped me survive a wicked Gleason biopsy score of 7.5, and my PSA has dropped from a high level down to 0.1 since the treatment, although the side-effects exacerbated a couple of issues commonly afflicting many other “old men”, but I can live with the discomfort.

While reading and digesting the superb comments and info being posted, I have redeployed some of my “sporting” funds into some more Bioscience equities, most of them being small-cap and speculative, but having charts that I consider bullish by my lights. I have fielded plenty of losers in the past, but my winners can overcome the odds. My stable of two dozen promising ponies, corralled with small-size bets that I can readily afford lose, now includes:

ATHX, Athersys; BNIKF, CGIX, Cancer Genetics; CHTP, Chelsea Thera; CTIX, Cellutix; DRIO, Labstyle Innovations; GALE, Galena Biopharmaceutical; GNVC, Genvec; ICCC, Immucell; IDRA, Idera Pharma; INO, Inovio Pharma; ITMN, Intermune,Inc.; MNKD, Mannkind Cp.; NBS, Neostem; NEO, Neogenomics; NPSP, NPS Pharma; NVAX, Novavax; RNN, Rexhan Pharma; SGMO, Sangamo Biosci; SRPT, Serapta Therapeutics; and TKMR, Texmira Pharma. I also have an open buy order for OPK,Opko Health

If you have any interesting info on any of these, we would welcome more of your perspicacious observations.

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karmaswimswami
January 21, 2014 4:30 pm
Reply to  1paglee

Thanks Robert. Still getting to know all of those companies. I must say I am not so keen on GALE at all. It would take a lot more positive data to make me a buyer of it.

My suspicion is that your PSA blip is not a portent of relapse or metastasis. What it does over the next few weeks will be key, but still, that is a really tiny number. Very sorry you had to go through what you went through in terms of surgery and pharmacotherapy. How to prevent this near-universal male outcome is a pressing, vital issue. It really disappointed me last year when the agent Yervoy bungled for prostate cancer. It was theoretically quite promising because it bypasses a key way that tumors dodge the immune system. It works for melanoma, but does nothing for prostate cancer.

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1paglee
1paglee
January 19, 2014 2:59 pm

I forgot to add this link to an interesting report on Cancer that appeared in last week’s London issue of The Economist:

http://www.economist.com/node/21592599/print

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siva
Member
siva
January 19, 2014 4:00 pm
Reply to  1paglee

Thanks Karmaswimswami, Travis and others to keep this thread alive. It has been highly enlightening to watch this thread. Special thanks to Karmaswimswami for selflessly providing his thoughts on various subjects here

Rob
Rob
January 19, 2014 3:35 pm

Dear Mr. Karmaswimswami, May I create an acronym, KSS, because I hope to have some accretive replies to your posts.
I own 70 +/- what I call microbio stocks. Follow 130 like minded on Twitter and don’t trade very much because I feel good about my DD on the stocks I own. I spend hrs. reading any number of published, related sources. I have followed this thread and want to compliment you on your depth of knowledge and interpretive communication skill. I have a shortcut on my desk top to this discussion thread. Thanks.
PS. Been on the fence with GALE. I’ll do something about that tomorrow.

karmaswimswami
January 19, 2014 5:13 pm

I am putting AtheroNova (AHRO) back on a watch list. I was not so favorable on it earlier, but I am reconsidering. Here’s why. Intercept shocked the whole world with its recent obeticholic acid data in NASH/NAFLD. This bile-salt agent may get FDA approved without a phase III. That this agent has such dramatic effects puts AHRO’s lead (and only) drug candidate back on the table, in my mind. It is hyodeoxycholic acid, another bile salt. They have data that in LDL receptor knockout mice, it reverses plaque. I have now found additional data that it probably activates certain genes associated with transport of lipid away from plaque and back to the liver. I am a little troubled by the fact that they seem to be doing their phase I and II trials in Russia, not a place known for quality or ethical research. However, I have some good contacts in Russian medicine I have emailed to help me find someone doing the studies there. I have also e-mailed the company asking for clarification. The key thing is this: the drug WILL sail through phase I. These agents have no adverse effects. High risk investment, of course. This company’s basket has only 1 egg. But if the agent works it will be a blockbuster, and now I am not so sure it won’t be, What happened with ICPT is too profound to write off AHRO yet.

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Steve
January 19, 2014 5:45 pm
Reply to  karmaswimswami

Karma: AtheroNova’s partners/primary funding source in this venture are CardioNova and its parent company, Maxwell Biotech Group, which are both Russian.

http://finance.yahoo.com/news/atheronova-announces-approval-phase-1-110000817.html

“We are delighted to have achieved this milestone approval for AHRO-001 and to be able to initiate clinical development of this exciting compound,” commented Dr. Alexey Eliseev, Managing Director of Maxwell Biotech Group, CardioNova’s parent company.

“We are excited that our many months of planning and effort will shortly result in the initiation of human clinical trials, potentially addressing one of the major health risks facing both Russia and the rest of the world,” remarked Andrey Boldyrev, General Director of CardioNova. “We are currently working with the CRO and the trial centers to distribute the approved protocol and making final preparations for the initiation of pre-screening and ultimately Phase 1 clinical trials in our Russian study centers.”

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karmaswimswami
January 19, 2014 6:20 pm
Reply to  Steve

Thanks Steve. I have sent some e-mails to Russia, though it is late there, and I won’t hear from them or the company til tomorrow at the earliest. For some reason, that stock is on the rise today in aftermarket trading. Here is what we need to decide: will positive phase I data move the stock? Again, it will SAIL through phase I. But I am not sure the investment community at large knows that, and so they will react positively to the news and buy. I also have an e-mail in to the lead researcher for the mouse study to see if there are new data on this agent that are not yet in print. Bile salts are very cool things. Axcan, now Aptalis, is developing a nonabsorbable sulfated ursodeoxycholic to prevent colon cancer. I was holding Axcan when they decided to take it private and made out like a bandit. If Aptalis ever goes public, it would be a huge buy. Brilliant company.The bile salts all occur naturally and tweak physiology in ways still not fully understood. Plain old deoxycholic acid is being used by Kythera, a cosmetic medical tech company, to obliterate fat under the chin. The literature on hyodeoxycholic acid is pretty small….no negative studies, just very few studies.

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KindergardenInvestor
January 22, 2014 1:50 am
Reply to  karmaswimswami

I’m sure you have seen this but it appears that Aptalis has been sold to Forest Labs.
http://www.reuters.com/article/2014/01/08/us-forest-aptalis-idUSBREA0702C20140108
It’s made the price of Forest rather volatile since the news came out. Any thoughts on that?

Alan Harris
Guest
Alan Harris
January 19, 2014 6:20 pm
Reply to  Steve

So theyre Russian? And?

karmaswimswami
January 19, 2014 8:01 pm
Reply to  Alan Harris

What I mean Alan is that there are serious problems with how medicine is practiced in Russia, Number one, there’s no concept of informed consent. Without informed consent, research is not legitimate and violates Helsinki principles. Putin’s government is utterly Praetorian, and as a result medicine there has become the same way. Those two bombings in Volgograd two weeks ago were not the work of Dagestanis or Chechens. They were carried out by the FSB, the successor to the KGB. Just like the ’99 Moscow apartment bombings.

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karmaswimswami
January 19, 2014 6:02 pm

To Robert Paglee: I am looking at all your companies, and some of them I know well. I would honestly suggest politely dumping ITMN (Intermune). It is one of the most cursed, jinxed names in big pharma. I have done studies and consulting for them before, and they have perennial problems with management and, shall we say, paucity of foresight. Their CEO dumped a bunch of shares a week ago, and has been selling a lot lately. Their only drug candidate is perfenidone for IPF. It is not an excellent drug. Whether it is approved or not, it is unlikely to get into wide use. They have no pipeline of consequence. I swear to you this company has a kind of inverse Midas touch when it comes to drug development. They sold their only decent drug, gamma-interferon, because they scandalized it and needed money to stay open. Sell with extreme prejudice. Only pain will come of holding this one.

karmaswimswami
January 19, 2014 7:36 pm

Terry: Nice post above. I am familiar with the 2005 PLoS One article by the Greek fellow. Rather than saying most truths are not truths, I would just say that all findings need to be qualified, contextualized, and not examined to the exclusion of other findings. It is a very real issue. Just last week, British Medical Journal published a debate over whether it should even continue to accept for publication any industry-sponsored studies. The concern isn’t so much that industry studies are fraudulent (they rarely are), but rather that there are defects in how questions are framed, and there is a bias to not publishing negative results, even though such results are vital. Non-efficacy, non-benefit is just as meaningful as efficacy and benefit.

A very real debate rages now in medicine about science-based medicine versus evidence-based medicine. Lots of physicians bridle at the latter, because it often finds null results. I should clarify what these terms mean. Science-based medicine is studying an effect, and putting it into practice on the basis of that effect. For example, statins lower cholesterol. Most FDA approvals are based on science-based medicine but not evidence based medicine. Evidence-based medicine concerns itself with more fundamental questions that take longer to answer. Not: do statins lower cholesterol, but rather: do statins prolong lives? Do they prevents strokes and MI’s? For secondary prevention, after a first event, the answer is yes. For primary prevention, preventing a first event, the answer is iffier. It is clear, I feel, that the new PCSK9 inhibtors will be approved for high cholesterol and eclipse the statins. I have no doubt. They do lower it whoppingly. But there is no evidence-based data that they prolong lives or prevent events.

The Gardasil debate is an excellent example of this. Gardasil was approved for science-based reasons. It creates antiHPV antibodies. Science reasoning is that HPV causes cervical cancer, and the vaccine potentiates the immune response to HPV. Ergo, the vaccine was approved. But the evidence-based question is: Does the vaccine prevent cervical cancer? That is a VERY different matter. In fact, 94 per cent of cervical HPV clears on its own within two years without vaccination. In fact, antibody titers fall to a non-protective level after 5 years. In fact, the Western rate of cervical cancer has fallen tremendously. So, in fact, the vaccine does NOT prevent cervical cancer at all.

Flu shots are au courant in this weather. They are approved because they raise antibody titers to last year’s strains. That’s what got them approved. But, an EBM question: does the flu vaccine prevent the flu? A 2010 Cochrane Collaboration analysis looked at 70,000 patients in 36 randomized clinical trials, 15 of which were sponsored by industry, of flu vaccination versus sham vaccination. It concluded that for every 100 people vaccinated, only 1 case of flu is prevented. Therefore, there just isn’t an evidence-based reason to be vaccinated.

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biocqr
biocqr
January 19, 2014 7:52 pm

Hi Karma, brilliant analysis. Thanks for all the great info. Have you looked at Genfit’s GFT505? It’s another NASH drug that suggests reverse cholesterol transport. In P2 trials the metabolic markers are similar or better than OCA… GFT505 increases insulin sensitivity, reduces HbA1c, raises HDL-C, lowers LDL, reduces ApoB & triglycerides + excellent safety. Mouse studies also show reversal of liver fibrosis. Genfit trades on the Paris exch as ALGFT/B03B708.

GFT505 is a dual PPAR agonist…
Activation of Peroxisome Proliferator–Activated Receptor (PPAR)d Promotes Reversal of Multiple Metabolic Abnormalities, Reduces Oxidative Stress, and Increases Fatty Acid Oxidation in Moderately Obese Men
http://diabetes.diabetesjournals.org/content/57/2/332.full?sid=02429956-fe60-4a50-aeca-2f108658d3a6

Dual Peroxisome Proliferator–Activated Receptor a/d Agonist GFT505 Improves Hepatic and Peripheral Insulin Sensitivity in Abdominally Obese Subjects
http://care.diabetesjournals.org/content/early/2013/05/23/dc12-2012

Hepatoprotective effects of the dual peroxisome proliferator-activated receptor alpha/delta agonist, GFT505, in rodent models of nonalcoholic fatty liver disease/nonalcoholic steatohepatitis.
http://www.ncbi.nlm.nih.gov/pubmed/23703580

Fast Break on a Fat Break: Mechanism of PPAR Regulation of Lipid Accumulation in Hepatocytes
http://goo.gl/eDacJl

GFT505 studies…
http://genfit.com/en/science-discovery/therapeutic-commitment/advanced-compound-status/index.html

Genfit investor presentation…
http://genfit.com/fileadmin/images/images/financial/2013.10.30_Presentation_SFAF.pdf

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jamespaul108
jamespaul108
January 20, 2014 11:25 am
Reply to  biocqr

Seems a better alternative than Intercept’s obeticholic acid according to a comment from “fleasnoo” on seekingalpha.com. On January 16, 2014, he wrote the following: “CV disease is their number 1 risk factor, not liver disease. Contrary to what many on this board mistakenly believe, these patients are decades away from potentially (as in <10% chance) developing cirrhosis. Exposing them to chronically elevated lipid abnormalities in the interim is far more likely to kill them than liver disease. If I had NASH and my doctor offerered me to go into ICPT's pivotal trial in NASH next year, I would say no, given the risk I might end up on the drug arm, rather than the placebo arm, thereby increasing my risk of dying. LDL elevation/ HDL lowering are well-established predictors of CV mortality/ morbidity, whereas the NAFLD score used in the FLINT study is of unestablished clinical relevance in NASH, which in itself, as a disease, is of lower morbidity mortality risk than CV disease. "

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karmaswimswami
January 20, 2014 11:44 am
Reply to  jamespaul108

To James Fernow: Yes, you make a good point, as does the person posting on Seeking Alpha about obeticholate. Thanks for an opportunity to discuss it more deeply. NASH and NAFLD are diseases caused by insulin resistance. That is the root cause. In fact, for years, I have suggested the disease be renamed insulin resistance hepatopathy (IRH) rather than NAFLD and NASH. They are a continuum, with NAFLD morphing into NASH as neutrophils come in, like ants at a picnic, and stellate cells get activated. Here is a critical thing about liver disease most people do not realize. Cirrhosis IS reversible. If anyone tells you different, walk away. If you have Laennec cirrhosis and quit drinking soon enough, you will lose your decompensated cirrhosis phenotype. If you have autoimmune hepatitis that has caused liver failure and you aggressively give the patient GOOD immunosuppressives such as tacrolimus and mycophenolate, trust me, their jaundice and ascites goes away! If you have HCV cirrhosis and evoke SVR, your hepatic scarring gets scissored up over time. Although only a minority of NASHers go to decompensated cirrhosis, it is awful when they do. Rotten candidates for surgery because they are usually obese, and the allograft NASHes right back down, quickly. Obeticholate is a game changer because it can take those bad-off patients and fix them without transplant. Although IRH owes to IR, metformin (an insulin sensitizer, but major shutter down of liver glucose output) has minimal effect on it. Pioglitazone and rosiglitazone control it, but really do not do much to make it regress. Genfit’s agent will be another PPAR-acting drug like the glitazones, and though i have seen the promising phase II data it has for NASH, frankly I want to see more data. I still haven’t gotten clarity that the Genfit drug doesn’t cause edema/weight gain/water retention. I don’t think anybody is advocating plopping all people with fatty livers on obeticholate. But certainly by biopsy criteria and by clinical discriminants (such as globulin fraction), I can definitely tell you whose gonna cirrhose from their NASH. And there are tons of these patients.

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jamespaul108
jamespaul108
January 20, 2014 10:54 pm
Reply to  karmaswimswami

I see, thanks for explaining that and for sharing your wealth of information on this entire thread. Count me among others here who have said that if you publish a newsletter, I would be a subscriber (if the cost is not too high).

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karmaswimswami
January 20, 2014 12:46 pm
Reply to  biocqr

William: I really appreciate you posting this. GFT505 is a shoo-in for approval. The December study in the journal Hepatology is a good one. They have done a bang-up job of characterizing the agent’s effects, including looking at certain ramifying markers of NASH not usually examined, such as TIMP. Their phase II studies are broad, diligent, high-quality. They probably are pursuing a NASH indication in addition to DM-II, although the minute it is approved for either it will be used for both. I am inclined to think, however, that success of this drug is baked into share price now. So I wonder what they have in store, what they are developing. Will look next at the investor presentation you provided.

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