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Do the Math: Ram Selvaraju on the Appeal of Biotechs in Orphan Diseases

Source: George S. Mack of The Life Sciences Report

Ideas get bigger when you share them...

April 22, 2014 (Investorideas.com Newswire) To cast a spotlight on disruptive biotechnology stocks, Raghuram "Ram" Selvaraju of Aegis Capital Corp. taps his experience as a molecular biologist, preclinical investigator and sellside analyst. In this, the last of his three interviews with The Life Sciences Report, Selvaraju highlights micro-, small- and mid-cap biotech names with therapies that may add years to patients' lives and liftoff to investor portfolios.

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The Life Sciences Report : Ram, we've seen some recent weakness in biotech stocks. Is it time for a pullback, or is there something else putting pressure on these stocks?

Ram Selvaraju : All this furor over Congressman Henry Waxman and his allies firing off a salvo to Gilead Sciences Inc. (GILD:NASDAQ) about the pricing of its hepatitis C (HCV) drug Sovaldi (sofosbuvir) probably hasn't escaped anyone's attention. I don't believe that Congressman Waxman, with all due respect, has a leg to stand on. Everyone knows that drug manufacturers customarily provide access to therapies for patients who are indigent, or who don't have adequate coverage from existing private insurance plans, via compassionate access or expanded use programs. Congressman Waxman's concern for HCV patients in disadvantaged communities is, in my view, misguided.

That doesn't even begin to factor in the simple economic argument that Sovaldi, priced at $84,000/patient ($84K) over 12 weeks, is actually saving the healthcare system money because existing HCV regimens must be used for longer periods, such as 48 weeks. Cure is a word we don't see often with respect to serious disease, but we've seen Sovaldi, in fact, cure patients in fewer than 12 weeks. For Congressman Waxman to question the pricing of Gilead's drug is wrongheaded. The fact that he did that publicly is, in my view, a fundamental reason why the biotech sector was under pressure in March.

Gilead has never publicized its response to Waxman's letter. It is our belief that the company will stand firm on Sovaldi pricing in the U.S., as it has done on multiple prior occasions when the pricing of its anti-HIV drugs was questioned.

TLSR : I'd like to talk about orphan disease indications. It seems counterintuitive to invest in drug development addressing rare disorders. You can't expect people to deploy risk capital where there's no upside, but recent experience teaches us that money can be made. Generally speaking, what's the value proposition in putting money into development of therapies for rare diseases? Why not just stay in oncology stocks?

RS : I think the principal reason the rare disease space has gotten so much traction with investors, and has been the focus of assiduous effort in drug development, is that the economics are actually very attractive. That attractiveness is driven by two fundamental principles. First, because the patient populations are so small, sales and marketing efforts are likely to be significantly less onerous and less expensive than the mass marketing needed for a primary care-targeted drug. Second, again because of that small number of patients, companies can charge a large amount per patient without getting significant pushback from reimbursement agencies. Keep in mind that every drug's price, at least in the U.S., is set through a discussion between reimbursement agencies and the purveyors of said drugs.

TLSR: Explain why the market--or payers, in this case--supports large reimbursements for rare disease drugs.

RS : Reimbursement agencies don't fight high prices because they can spread the aggregate cost of high-priced drugs across their entire subscriber base. For the larger reimbursement agencies, that base represents many millions of people. If all those people are paying their health insurance premiums every year and only 1 in 10,000 or 20,000--or maybe even 1 in 100,000--insured patients is in need of a rare disease drug, the cost of that drug is spread over the very large population of covered lives. The reimbursement agencies will happily agree to that because if they don't provide some incentive, nobody is going to provide drugs for these diseases, many of which are chronic in nature and are underserved by existing therapies.

You suggested investors might stay in the oncology market. A number of rare cancers have cropped up over the course of the past several decades. Many of them are in the domain of hematologic oncology--the blood cancers. Particularly notorious among these are hairy cell leukemia, natural killer-cell lymphoma, peripheral/cutaneous T-cell lymphoma, blastic plasmacytoid dendritic cell neoplasm (BPDCN) and the like. As a large number of these rare cancers afflict very small patient populations, cancers are not exempt from the rare disease category.

TLSR : The difference between rare hematologic cancers and other rare diseases is that the drugs useful for BPDCN and others might be useful in several hematologic diseases. The drug developer can get an approval in the rarest disease, and then begin doing clinical trials in the less rare disease categories, at the same time some physicians begin to use the agents on an off-label basis. I see a difference between the two categories that you mentioned. How do you see that?

RS : I would say that there are extremely rare niche indications everywhere. Some are metabolic in nature, some are oncology-focused and others are central nervous system (CNS)-related. Some diseases were considered rare a few years ago, but seem common today. A good example of that phenomenon is multiple sclerosis (MS). About 15–20 years ago, MS was considered a rare disease, but its prevalence and incidence have been clarified to the point that now at least 500K people are living with the disease just in the U.S. That is clearly above the 200K-patient threshold, the figure used in the Orphan Drug Act to specify what should be classified an orphan disease. Cystic fibrosis is another disorder still well below the Orphan Drug Act's defined threshold, but it is not something that can be considered ultra-rare any more.

TLSR : What constitutes an ultra-rare disease today?

RS : To me, ultra-rare diseases represent a treatable patient pool of 10--15K individuals or less. There are some rare diseases that afflict only 500–1K patients. That's what I would call hyper-rare, and it's very difficult to make money with these because even if a company prices a drug high, it's going to be difficult to get enough patients to justify the expense associated with clinical development and launch.

It's also impractical to do expensive Phase 3 trials in hyper-rare indications because so few people have the diseases. That brings up another important question: Given so few people, how does an investigator really demonstrate the effectiveness of a drug? It's not possible to do a well-powered Phase 3 trial. BPDCN is ultra-orphan, with only 2K patients/year diagnosed. We cover Stemline Therapeutics Inc. (STML:NASDAQ), which is developing SL-401 (human recombinant IL-3 coupled to a truncated diphtheria toxin payload) targeting IL-3R-positive cancers, with BPDCN being the lead indication. This year the company is launching a Phase 2, single-arm trial with only 40 patients, which could lead to approval and launch in 2015.

Another case in point is Catalyst Pharmaceutical Partners Inc. (CPRX:NASDAQ), which we cover. Catalyst is developing Firdapse (amifampridine) for the treatment of an autoimmune neuromuscular disease called Lambert-Eaton myasthenic syndrome (LEMS). The number of LEMS patients across the globe is only estimated at 3–4K. Catalyst is currently doing a Phase 3 trial, and announced on April 1 that it had completed its 36-patient enrollment in the study. It's a very small trial for a Phase 3, but that's the largest you can run in a very rare disease like this.

TLSR : Let's talk about Catalyst for a moment. Your target price is $6, which is more than a double but not quite a triple from current price levels. You have written that Firdapse is very derisked because this molecule has been used for many years in Europe for LEMS. Given that you see it as a derisked asset, why do you believe there's still so much upside?

RS : A lot of the issues surrounding Catalyst involve the firm's past. Back in 2009 it failed in Phase 2 with a drug called vigabatrin for the treatment of addiction. Since then the company has been on the comeback trail. Catalyst's new drug, Firdapse, as you said, has been marketed for quite some time in Europe, where it is the property of BioMarin Pharmaceuticals Inc. (BMRN:NASDAQ), which retains about a 13% ownership stake in Catalyst. BioMarin licensed Firdapse to Catalyst for North America.

While this drug will never be a blockbuster, our view is that it could easily generate around $100M in net sales for Catalyst in North America alone, and should represent a substantial and lucrative market opportunity for a company with a current market cap of just $134M. That's especially true when you consider that one of the key attractions of rare diseases is that companies don't need to spend a lot on sales and marketing. There is a named-patient registry for LEMS patients, and it is unlikely that Catalyst will need a sales force of 20–25 people to promote this drug--that is, if the company remains independent. I would argue that if Catalyst manages to secure marketing approval in the U.S. for Firdapse, BioMarin, a company with a $9 billion ($9B) market value, would at least entertain the thought of buying it.

Another reason I consider Catalyst risk-mitigated is that Firdapse is not the only drug the company possesses. Catalyst has a Phase 2 agent called CPP-115, which is a derivative of vigabatrin. Vigabatrin has since been brought to market successfully by Sanofi SA (SNY:NYSE) for other indications. CPP-115 was designed to specifically address some of the toxicities associated with vigabatrin, mainly visual field defects. But CPP-115 could be considered superior to vigabatrin in all the indications where vigabatrin is approved, or has been used successfully in the past. This includes a long line of indications such as epilepsy, infantile spasms, refractory complex partial seizures and the like.

At this juncture, Catalyst is trading at a market valuation that has not accorded any value whatsoever to CPP-115. This is surprising from our perspective, because clearly vigabatrin works. Its derivative, CPP-115, is closely related in mechanism of action and was designed by Richard Silverman, a professor emeritus of chemistry at Northwestern University who was responsible for the design of two blockbuster drugs in the CNS space, Neurontin (gabapentin; Pfizer Inc. [PFE:NYSE]) and Lyrica (pregabalin; Pfizer). Both Neurontin and Lyrica secured peak sales of multiple billions of dollars in the U.S.

To me, not only is Catalyst a risk-mitigated value proposition, but there is significant potential for upside. We believe that our price target price could potentially underestimate the company's overall long-term prospects.

TLSR : Just to be clear, Firdapse is the primary driver of Catalyst Pharmaceutical at this point, and it's where the company is directing its capital resources. Is that right?

RS : That is correct. Catalyst has enough capital on hand to complete its Phase 3 trial with Firdapse, report results and file the new drug application (NDA), which we anticipate will occur at the end of Q1/15. But it would need more capital to continue operations through to approval and launch of Firdapse.

TLSR : Is Catalyst still on track for a H1/16 launch of Firdapse?

RS : I would anticipate so, yes. That might well wind up being conservative, because this drug has breakthrough therapy designation, which typically implies faster review times at the FDA. Assuming Catalyst can get the drug filed at the FDA by the end of Q1/15, Firdapse has a substantial possibility of being approved before the end of 2015, which means it could be on the market before the end of 2015, at the earliest. All of these timelines bode well for an investor in Catalyst.

TLSR : We have seen investor interest cycle through HCV to orphan drugs. I'm wondering if you think stem cell companies are next in line. I know you follow a couple of stem cell companies that have milestones this year. Could 2014 be the year investors notice stem cell developers?

RS : We've been focused on the stem cell space for quite a while, and have two stem cell-focused companies under coverage, these being Neuralstem Inc. (CUR:NYSE.MKT) and NeoStem Inc. (NBS:NASDAQ). In both of those cases, we believe that 2014 could be a transformative year.

In the case of Neuralstem, we've seen the company go from strength to strength. It has put out a great deal of favorable preclinical data recently in animal models. The company also plans to begin dosing in a Phase 1/2 study assessing its proprietary NSI-566 (human fetal spinal cord-derived stem cells) in the context of spinal cord injury (SCI), an indication in which it recently received formal clearance from the FDA to begin treating patients. It has a Phase 2 study ongoing with NSI-566 in amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig's disease, which is slated to wrap up patient dosing about the middle of this year, and could potentially report initial efficacy data late in H2/14. One endpoint is to demonstrate a noticeable and meaningful impact on various functional outcomes--forced vital capacity, or the ability to breathe, in particular. With progressive motor neuron disease, ALS patients effectively lose the ability to walk, stand, swallow and breathe on their own. If this drug is able to regenerate patients' ability to breathe, clearly that would be grounds for accelerated approval--and that would obviously be grounds for a substantial influx of interest in Neuralstem's stock.

Those two significant value drivers for Neuralstem, which could be considered transformative, occur this year. The initiation of patient dosing in spinal cord injury is a very substantial matter, since spinal cord injury is a complete greenfield opportunity. Nothing currently approved does anything meaningful for these patients. Any impact from the Phase 2 ALS study would be grounds for the company to go to the FDA and ask for accelerated approval, conditional or otherwise.

TLSR : You briefly referenced Neuralstem's animal data. On March 28 the company reported an ischemic-stroke study in rat models where post-stroke signs were dramatically improved. I'm noting that Neuralstem's NSI-566 cells actually engraft in the animal's CNS, which is very much like the StemCells Inc.'s (STEM:NASDAQ) therapeutic model.

RS : That is correct, and is one of the characteristics that first drew us to Neuralstem. When we visited the company's laboratories in San Diego back in 2010, the team showed us histology data from rat experiments, which not only demonstrated engraftment of human neural stem cells onto rat nervous system tissue, but showed that the human neural stem cells were able to completely regenerate rats' spinal axonal tracts across the entire rostrocaudal length--meaning that the nerves grew from head to tail. That's unprecedented. I myself did experiments with cells when I was working in industry, and I never managed to obtain results like that.

This work was the basis for a seminal paper in the journal Cell, “ Long-Distance Growth and Connectivity of Neural Stem Cells after Severe Spinal Cord Injury.” Cell is one of the highest impact-factor scientific journals in the world. I expect this is the fundamental thrust of Neuralstem's ability to demonstrate clinical efficacy with its proprietary neural stem cell-based preparations. The science is cutting edge, and of a very high quality.

TLSR : What about NeoStem? What are you looking for in 2014?

RS : NeoStem has an important upcoming milestone. In six or seven months, the company will unveil data from its Phase 2b PRESERVE trial, with its stem cell solution, AMR-001 (autologous bone marrow-derived CD34+/CXCR4+-enriched cells) aimed at treatment of ST-elevation myocardial infarction (STEMI).

STEMI is one of the most serious forms of heart attack, and is very difficult to treat with existing interventional means. NeoStem is effectively administering AMR-001 into the cardiac tissue, where the cells are expected to play a role in tissue remodeling and prevention of the long-term damage that typically results from the ischemia associated with STEMI. The PRESERVE study closed enrollment in mid-December 2013, and the company anticipates results within about eight months of the close of enrollment--in the October timeframe. If AMR-001 demonstrates statistically significant impact in STEMI, I anticipate it could capitalize NeoStem to be valued at more than $1B. The company currently has a market cap of just under $200M.

TLSR : The PRESERVE trial is with 160 patients, according to ClinicalTrials.gov, and is randomized and double-blind. If the data are statistically significant, would the FDA ask for another study?

RS : It's debatable whether the FDA would ask for more trials before AMR-001 could be filed for approval. However, if the data are positive, NeoStem will most likely be able to enter into a partnership in the regenerative medicine space. I think the company would be a perfect potential addition for a company like Baxter International Inc. (BAX:NYSE), which intends to split into two entities, very similar to the way Abbott Laboratories (ABT:NYSE) split into Abbott Labs, its medical equipment division, and AbbVie, the pharmaceutical division. I believe that once Baxter's split is complete, likely in early 2015, the Baxter biotech unit is going to extend its initiative into regenerative medicine, because that's really what Baxter is all about. Baxter would be one of the frontrunners to partner with NeoStem on AMR-001 if the PRESERVE study reports positive results.

TLSR: StemCells Inc. has demonstrated durable engraftment with its HuCNS-SC cells (purified adult human neural stem cells) in the brains of deceased patients with lysosomal storage disorders. The tissue with engrafted cells was taken at autopsy. Are you familiar with StemCells Inc.?

RS : Yes, I am familiar with the company. StemCells and Neuralstem have been fighting a running legal battle because they have overlapping intellectual property (IP), and each wants to be declared the one whose IP has priority. As of yet, there doesn't seem to be an end in sight to the litigation. The two companies are targeting different indications, but in my view, the science at StemCells Inc. isn't as good as the science at Neuralstem. StemCells Inc. does not have the publication track record that Neuralstem possesses. But that's just my opinion.

I think there's more than enough room for both of these companies. I would laud any future efficacy data that StemCells Inc. is able to generate that showcase the principle of neural stem cells being able to generate therapeutic efficacy in various contexts. But as of right now, we cover Neuralstem because we believe it has higher quality science.

TLSR : The last time we spoke, you brought up Acorda Therapeutics Inc. (ACOR:NASDAQ), which you recommended when it was just $2/share. Could you talk about your value proposition for Acorda?

RS: Yes. I've followed Acorda Therapeutics for a lengthy period of time, and I know its CEO Ron Cohen very well. He is a physician, and has always been focused on meeting the needs of patients. Acorda has been a groundbreaking company, and I think it's been one of the most underrated stocks in the biotech sector for a long time. The company currently markets Ampyra (dalfampridine), which is the world's only MS drug approved for use across the entire spectrum of MS, a disease for which there is no cure.

Initially MS manifests itself as a series of attacks, in which patients can't get out of bed in the morning. They find it difficult to walk, they suddenly fall down, things like that. Existing drugs reduce the extent to which those attacks occur, and their severity, but over time every patient progresses and winds up with long-term disability.

Acorda's Ampyra is the only agent specifically aimed at improving walking ability in MS patients. It was a groundbreaking therapy when it was approved in January 2010. In my estimation, Ampyra still represents good value for the money because many MS drugs have dramatically increased in price, and Ampyra costs less than $20K/year/patient--a bargain when you consider other agents are in the $50–$60K/year/patient range, even though they are not useful in progressive forms of the disease, whereas Acorda's drug is.

What I think makes Acorda particularly compelling is that it is developing Ampyra as a treatment for post-stroke deficit. There are 7M people in the U.S. alone with some form of post-stroke cognitive or neurological deficit, such as in the ability to walk, in hand strength, in manual dexterity. The idea is that Ampyra would have the same efficacy in stroke patients that it does in patients with MS. The MS population is, at maximum, only 700K people; the post-stroke deficit market is at least 10 times as large. You can go ahead and do the math.

Acorda is starting a Phase 2b/3 study this year in post-stroke patients, which should read out early next year. If that study is positive, we anticipate that Acorda could get approval in this indication. Acorda is trying to get Ampyra approved in post-stroke deficit on a once-daily basis, where it would have entirely new IP protecting the drug until beyond 2030. It currently has issued IP on Ampyra in MS that goes out to 2027.

TLSR : Is the market ascribing enough value to Ampyra, especially considering the much larger market in post-stroke deficit?

RS: I don't believe that the market is currently valuing Acorda correctly. Investors appear to think that Ampyra will face generic competition in MS before 2027. And I don't believe the market is adequately valuing the importance of the post-stroke deficit indication, which is a greenfield opportunity. Like ALS, there is nothing currently approved that can address these disorders, and affected patients are begging for therapy.

On top of everything else, Acorda is going to use what's called a "responder analysis" in its Phase 2b/3 trial in post-stroke deficit. This is the same clinical study design it used in MS, where both Phase 3 trials were positive. We're very bullish on Acorda's prospects; we think that this company could be a force in post-stroke deficit, and we believe the market is currently undervaluing its potential in both indications. Acorda also has a rich pipeline.

TLSR : I know you follow Galectin Therapeutics Inc. (GALT:NASDAQ). This company's shares are showing relative weakness even against a weak biotech market. What's your case for this company?

RS : Galectin is a very interesting case. It reported positive data on April 1 from the first cohort in a Phase 1 study of GR-MD-02 (galactoarabino-rhamnogalaturonate) in patients with nonalcoholic steatohepatitis (NASH), or fatty liver disease. This was not a plain-vanilla Phase 1 study in healthy volunteers, so I was surprised by the relatively negative, lukewarm market reaction.

Galectin's market cap is less than $300M, and this weakness has created a buying opportunity. The company's closest direct comparable, in my view, is a company called Intercept Pharmaceuticals Inc. (ICPT:NASDAQ), which is currently trading at a market cap of less than $5B. I do not believe that this huge discrepancy in valuation between Galectin and Intercept is in any way justified. I can tell you that the Intercept drug, obeticholic acid (OCA), is effective, and the company may be three to four years ahead of Galectin's GR-MD-02 in its development cycle. But OCA is not approved, and it has side effects, especially at higher doses. Patients on OCA have been shown to scratch themselves so severely that they bleed, and the drug has been associated with a higher incidence of elevated cholesterol and cardiovascular side effects. Not only does OCA have safety issues, it also cannot reverse liver fibrosis. It can attenuate the progression of liver fibrosis (i.e., slow it down), but it cannot reverse it, which is the target indication.

Our contention has always been that Galectin is potentially a best-in-class company because its drug, GR-MD-02, based on the company's proprietary galectin-inhibiting platform, has the ability not only to attenuate the progression of fibrosis, but to actually reverse it.

TLSR: Ram, I assume that you perceive GR-MD-02 to be low on side effects and toxicity.

RS: That's what we've seen from the initial cohort of patients. There were no significant treatment-emergent adverse events. The drug was safe and well tolerated, and it also demonstrated, most importantly, attenuation of both fibrosis markers and inflammation markers. Pro-inflammatory cytokines went down. Markers of liver injury went down. Markers of fibrosis went down. These were all assayed using serum biomarker endpoints. The company didn't actually take biopsies of tissue from the liver to observe the histopathology, but that's going to come in Phase 2.

One other thing: Since all of Galectin's drugs, including GR-MD-02, are based on very simple carbohydrate chemistry, they break down in the body to nothing more harmful than simple sugars and water. It is highly unlikely, in our view, that any of Galectin's drugs would ever show systemic toxicity, or any substantial side effects. All the indications are that Galectin could have a best-in-class drug, and I do not believe the market is adequately giving it credit.

TLSR : Let me ask you about one final company today. Although it's not in your formal coverage, I know you are familiar with Arno Therapeutics Inc. (ARNI:OTC.MKTS). It's an early-stage oncology company with several clinical-stage assets. Tell me what the company is focusing on. What are the value drivers in the pipeline?

RS : In my view, the principal driver is onapristone, which is currently in a Phase 1 dose-escalation trial in post-menopausal women with breast and endometrial cancers. The drug is slated to enter a Phase 2 trial before the end of this year. Onapristone is also in clinical development in castration-resistant prostate cancer (CRPC).

Given the multiple cancer indications in which onapristone could be deployed, I believe it could legitimately be considered a pipeline in a single product. Moreover, onapristone has a large-cap pharmaceutical pedigree, having originated from the laboratories of Schering AG, now a unit of Bayer (BAYN:XETRA), and has several unique attributes, including an ability to inhibit nuclear translocation of the mutant progesterone receptor, which is known to be capable of constitutive activation. Thus, we believe that onapristone may be able to evade cancer cells' canonical mechanisms of resistance.

TLSR : Given onapristone's mechanism of action in targeting progesterone receptor-positive tumors, how large could the market be?

RS : The cancer types that onapristone is expected to be deployed against represent very substantial markets--breast cancer, endometrial cancers and CRPC, for starters. Even if we assume onapristone winds up a drug of last resort for individuals whose cancer has become resistant to existing therapies, the market could be huge. It would include patients whose cancers have become resistant to drugs such as Tykerb (lapatinib; GlaxoSmithKline [GSK:NYSE]) or Herceptin (trastuzumab; Genentech/ Roche Holding AG [RHHBY:OTCQX]) for breast cancer, or Xtandi (enzalutamide; Medivation Inc. [MDVN:NASDAQ]) or Zytiga (abiraterone acetate; Janssen Biotech Inc., a unit of Johnson & Johnson [JNJ:NYSE]) for prostate cancer.

TLSR : Arno has a couple of Phase 1 programs, aside from onapristone, and a Phase 2 program in glioblastoma multiforme (GBM). Since onapristone is such an early-stage molecule--now in a dose-finding, open-label trial of just 60 patients--how do investors place a value on a program that's so immature?

RS : A surprising number of savvy investors have ponied up capital. They include UCLA urologist and biotech startup entrepreneur Arie Belldegrun, venture capital firm Pontifax Group in Israel, and OPKO Health Inc. (OPK:NYSE) CEO Phillip Frost, who is a physician and also chairman of Teva Pharmaceutical Industries Ltd. (TEVA:NASDAQ). Belldegrun, in particular, is notable because of his background as a urologic oncologist and because of his track record in the biotech sector, having founded Agensys Inc., a developer of therapeutic monoclonal antibodies, which was sold to Astellas Pharma Inc. (ALPMF:OTCPK) in 2007 for $537M. These investors see the promise in onapristone from a mechanistic perspective, and they have not been afraid to invest at this early stage.

In addition, the company is developing a proprietary companion diagnostic, which makes it all the more attractive and positions onapristone in the same vein as other personalized medicine approaches in cancer, which have achieved significant traction in recent years. Onapristone is the focus, but the other molecules that Arno is working on--namely, AR-42 and AR-12--are both aimed at hot targets (histone deacetylases and the PI3K/Akt pathway, respectively), and therefore could become important value drivers within the next 18–24 months.

TLSR : Onapristone is a type 1 progesterone receptor antagonist, and I know there have been some clinical-stage setbacks in this realm. Has this scared investors away?

RS : The progesterone receptor is a validated target, and no other drugs hit this receptor in the same manner as onapristone. I don't think those earlier failures have much relevance for Arno Therapeutics and consideration of the risk factors inherent to this company as an investment. The setbacks were in the treatment of uterine fibroids. There is a lot of evidence of efficacy for selective progesterone receptor modulators in uterine fibroid treatment, but the main issue was side effects. In the case of Arno's drug, while the mechanism may be similar, the clinical indications being targeted are completely different. Even if Arno's drug has menstruation-suppressing capacity, this would not be a concern in post-menopausal women and obviously not in men with CRPC. Also, the side effect-burden tolerability is much higher in cancer than in other indications.

That said, let me reiterate that, as with any other investment, there are risks associated with Arno Therapeutics. However, we see onapristone as an attractive drug, and would note the distinct similarities in the way onapristone works and the mechanism of action for Medivation's groundbreaking drug Xtandi. Xtandi has the unique ability to block nuclear translocation of the androgen receptor. Arno's drug does the same thing, only with the progesterone receptor. The basic impact is the same--to make resistance much more difficult for the cancer cells expressing these mutant, constitutively active receptors.

TLSR : Thank you very much. A pleasure, as always.

RS : The pleasure was mine.

Raghuram "Ram" Selvaraju's professional career started at the Geneva-based biotech firm Serono in 2000, where he discovered the first novel protein candidate developed entirely within the company. He subsequently became the youngest recipient of the company's Inventorship Award for Exceptional Innovation and Creativity. Selvaraju started in the securities industry with Rodman & Renshaw as a biotechnology equity research analyst. He was the top-ranked (#1) biotech analyst in The Wall Street Journal's "Best on the Street" survey (2006) and went on to become head of healthcare equity research at Hapoalim Securities, the New York-based broker/dealer subsidiary of Bank Hapoalim B. M., Israel's largest financial services group. While at Hapoalim, Selvaraju was regularly featured in The Wall Street Journal, Barron's, BioWorld Today, and Reuters/AP. He was also a regular guest on the Bloomberg TV program "Taking Stock," appeared with Bloomberg TV's on-air correspondents Betty Liu and Gigi Stone and was a guest on CNBC's "Street Signs with Herb Greenberg." He is currently an analyst with Aegis Capital Corp.

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1) George S. Mack conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Arno Therapeutics Inc., OPKO Health Inc., StemCells Inc., Neuralstem Inc., NeoStem Inc. Streetwise Reports does not accept stock in exchange for its services.
3) Raghuram Selvaraju: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
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