I really havn't paid much attention to this subject recently but after following some biotech investments, namely Arena Pharmaceuticals (ARNA) and researched past events with Dendreon (DNDN) I've grown concerned with this issue.
Here are a few points I would like to point out for discussion.
1. Dendreon's drug provenge, an effective prostate cancer drug was rejected for approval by the FDA after receiving a positive approval vote on a review panel in 2007. The FDA wanted more studies citing it wasn't effective because it didn't decrease tumor size. however it extended survivability. I believe chemo-therapy companies lined the pockets of the FDA directors to reject this. After much public outrage, and loss of life that could have been saved the drug was finally approved.
2. Arena's drug Lorcaserin goes up for approval decision on Oct. 22nd. A few of you may have seen my posts talking about this company in the money section. Before Arena's recommendation panel the FDA is supposed to release briefing documents which overview the issues and discussions to be had the day of the panel. These documents are supposed to be private to the company and FDA until 2 days before.
What is suspicious to me is over the 2 week period before the document release several analysts downgraded Arena based off of no news citing a 50% cut in price. Why? Arena has the only obesity drug with the safest profile proven by clinical trials. In addition to the downgrade short interest in the stock increased to 40%, about 40million shares. Tuesday before the panel review, the documents are released. In pre-market trading the price tanks. News stories pop up everywhere citing issues with cancer in rats during pre-clinical trials. This document was 270 pages. I don't know who could mow through that, and INSTANTLY have a story posted everywhere in the morning, in some cases before they were even posted on the FDA website. I believe the FDA or someone leaked this documents to hedge funds in order to generate billions.
Fast forward to the panel. Most media outlets wont tell you that the FDA combined data of benign tumors and malignant tumors to reached statistical significance. Why would any medical professional combine benign tumors? Even at that, malignant tumors only showed significance at 84x the human dose. FDA guidance dismisses anything above 25x. In addition during the panel review they included no Oncologist, toxicologist, or any cancer expert. Why is this? After the director using comments such as "If you approve this drug your name will be forever attached to a drug that causes cancer," suggests they scared their incompetent "experts" into voting no. The shorts won, using their fear campaign they got people to panic sell, hit stop loss triggers, and cripple the stock, gaining massive profits in the meantime.
3. The Facts:
1) The FDA's Commisioner, Margaret Hamburg, is married to Peter Brown.
2) Peter Brown is co-CEO of Renaissance Technologies.
3) Renaissance Technologies runs four hedge funds.
4) The Medallion Fund is their "private fund"; it's is the only RT fund that is closed to outside investors, owned only by employees of RT.
5) Congress did not require that Dr. Hamburg and her husband divest themselves of their involvement in the Medallion Fund, as it is a quant fund, with human input only given "in rare instances". (Rare? Maybe, but human "input" is still possible.) http://online.wsj.com/article/SB124328188115551961.html
6) The Medallion Fund FAR outperforms not only the other Renaissance funds, but most funds overall; in 2008, the Medallion Fund returned 80%, while the other funds struggled or crumbled.
"Astonishingly, out of the 148 months that elapsed between January 1993 and April 2005, Medallion only had 17 monthly losses. Out of 49 quarters in the same time period, Medallion only posted three quarterly losses. Additionally, it has seen a yearly Sharpe ratio of 1.68. In twelve plus years of trading, Rentec's Medallion Fund has never had a down year."
Another article showing internal scientists are coerced into unethical actions by management.
Here is an online petition for approval of Arena's drug Lorqess. In it you will find more detail about the summary I gave and what actually happened. Also sign the petition if you want to help an American small biotech stand up to this injustice.
Yes I do have a small long position in this company. This was one of the first stocks i started buying 5 yrs ago when I was 21.
I know its a lot to read, but this is the classroom GTFO or STFU if your going to complain.
09-28-2010 02:35 PM
Told Ya So in '08
Not sure how credible the source is but I did find this, the article is from September 17
Originally Posted by Seeking Alpha
FDA did some shadey stuff to get artificial sweeteners on the market. Nothing new about the FDA being corrupt.
Yes i admit the efficacy wasn't stupendous, but they did hit the FDA benchmarks set in their 2007 guidelines. There is no gray area here, either you hit what they wanted or didn't. The FDA shouldn't state targets if they wont stand behind them.
Originally Posted by MBGTO
Arena did the best they could with the rat trials, i just think it smells rotten that they manipulated the data on tumors to reach statistical significance, and no oncologists appointed by the FDA to give their expert review? Cmon. ROTTEN i tell you ROTTEN!
Told Ya So in '08
I dunno, just showing what I found with a simple search. I could see that raising some eye brows. I don't doubt one bit that the FDA is corrupt just like pretty much every other government agency ran by the Federal Government.
Originally Posted by MoToHeAd125
Fallout Mechanical Inst.
+1 on that mess. My body rejects that crap outright. I take a sip of Diet Coke and my innards twist up immediately.
Originally Posted by Replica