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PropThink: Can Patients Scoop Clinical Trial Results?

By Jason Napodano, CFA

In the age of the Internet and social media portals such as Facebook and Twitter, investors are turning more and more to non-conventional sources of information to gain an advantage on investing in the stock market. With a little detective work, the ordinary retail investor can level the playing field versus the professional analyst or money manager, and even game the system to an advantage.

No industry presents more of a potential opportunity to scoop a story than the biotech sector. With over 400 publicly traded pharmaceutical and biotech companies testing their drugs in over 45,000 active clinical trials, many of these trials with hundreds or even thousands of patients, somewhere out there, someone is talking, or tweeting, or blogging.

No example is more representative than what was recently seen with Sarepta Therapeutics (NASDAQ:SRPT - News). Prior to the release of thephase IIb resultson October 3, 2012, Sarepta shares had been slowly trending higher for the better part of the prior three months. Interest in the story, and eteplirsen, a RNA-based therapeutics that is designed to repair a genetic mutation in certain patients with duchenne muscular dystrophy (DMD), was first generated by the company when it reportedencouraging preliminary resultsfrom the phase IIb study back in July 2012.

However, the press release alone from Sarepta wasn't enough to send the shares from $3 per share to nearly $17 prior to the release of the full data three months later. Instead, what drove meaningful excitement and net buying in the stock were videos and blogging on twitter by some of the patients prior to the company making the full results available. Parents of three of the eight subjects who were in phase IIb trial had been publicly discussing the results with local media (source,source) and even posted videos of their children's impressive recoveries on YouTube (source,source).

Biotech investors even took to the Web, following the mother (@jennmcnary) of one of the subjects in the trial on Twitter, and reading her blog ( You can't blame these patients. The eteplirsen results were unprecedented, and to the family members of children with DMD, a godsend. Often patients are not asked to sign confidentiality agreements before they enter trials. And patients and their family members are far more interested in treating the disease then running to check stock quotes online.

The practice of patients discussing clinical trial results is becoming more common. Websites likeWebMDandDrugs.comhave forums where patients with specific diseases can go and discuss coping with their disease, their symptoms, drugs they're on, and even exciting results of clinical trials. Organizations like the Alzheimer's Association, Parkinson's Disease Foundation, Crohn's and Colitis Foundation of America, and Obesity Society of America all have pretty in-depth websites aimed at educating and connecting patients with diseases. Any one of these has the potential to scoop clinical trial results when patients talk.

If that's not enough, medical and professional organizations may scoop clinical trial results. Last month we wrote anarticle about Pozen(NASDAQ:POZN - News) prior to the company presenting results of its phase III trial for PA-325/40. The drug is a combination aspirin and omeprazole product designed for patients that require daily aspirin therapy for the secondary prevention of cardiovascular events, but also at risk for development of gastric ulcers.

I had not seen the data from the trial, but found on the American College of Gastroenterology (ACG) website thepreliminary itineraryfor the meeting. Inside the itinerary I noticed that Pozen had received two awards for its poster on the data. One of the awards was the ACG's prestigious Presidential Poster Award. Again, I hadn't seen the data, but clearly the ACG Educational Affairs Committee had, and if Pozen won the Presidential Poster Award, a recognition awarded to the, "Most highly ranked abstracts selected for the poster sessions in each category."then I assumed the data was outstanding. As it turns out, I was right. The data waspretty impressive.

Is It Happening Again?

Lately I've been watching shares of Neuralstem (NYSEAMEX:CUR - News). The company recently completed a phase I trial testing NSI-566, a mixture of human neural stem cells injected directly into a patients lumbar or cervical spinal cord for the treatment of Amyotrophic Lateral Sclerosis (ALS). The phase I trial was a 15 patient open-label design. Neuralstem published preliminary results from the first 12 patients of the trial in Stem Cells (2012;30:1144-1151). Since that time, three new patients and three returning patients have received new injections of NSI-566.

Analysis of the ongoing phase 1 trial in ALS continues. Thefinal patientwas treated with five unilateral cervical injections in August 2012. The last three patients treated (patients #16, #17, and #18) all previously completed ten bilateral lumbar spinal cord injections (patients #10, #11, and #12). The data published in Stem Cell showed clear signs of disease stabilization in a subset of ambulatory patients on the ALS Functional Rating Scale (ALSFRS-R), as well as a Forced Vital Capacity (FVC) and Hand-Held Dynamometer (HHD) scales. If we know anything about ALS, it's that it is a rapidly progressive and degenerative disease. Patients do not spontaneously stabilize.

One patient (#11), named Ted Harada, showed significant improvement in motor function. Mr. Harada's improvements were so much so that he was able to walk without a cane. Physicians even had to re-diagnose his disease to confirm ALS after his unprecedented improvement following lumbar spinal cord injections of NSI-566.

Similar to what we saw above with Sarepta and eteplirsen, Mr. Harada discussed his results with local media (source). An article by Crain's Detroit Business (link) highlighted the success of Mr. Harada, and another ALS patient, Ed Tessaro, after receiving another round of treatment. There's evena video interviewof both Mr. Harada and Mr. Tessaro discussing their experiences with NSI-566.Continue reading by clicking here.

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