After consultation with the U.S. Food and Drug Administration the division said the recall effects some liquid products manufactured in the United States. In Canada the products effected are all lots of Children’s MOTRIN and Infants’ MOTRIN liquid suspension products and Children’s TYLENOL Cough & Runny Nose liquid suspension only.

Douglas A. McIntyre

As a reminder, there is still hope that the EU might actually save it when the FDA wouldn’t.

Dendreon shares are now down over 7% to $5.37, and its 52-week trading range is $3.57 to $25.25.

Jon C. Ogg
February 13, 2008

Cephalon gave its own warnings on this, and today the Food & Drug Administration has sent out communication of its own with warnings to pay close attention to the same issues.  Of course it included that the FDA was closely reviewing and monitoring the situation.  The long and short of it is that this is a mere formality out of the FDA and would have been expected.  There is not really any new data in the FDA letter, other than the fact the letter is out now.

Jon C. Ogg
September 26, 2007

Below is a copy of the electronic communication from the FDA:

FDA Warns of Potential Serious Side Effects with Breakthrough Cancer Pain Drug

The Food and Drug Administration isalerting health care professionals and consumers to concerns over theuse of Fentora (fentanyl buccal) tablets after recent reports of deathsand other adverse events.

Fentora, a potent opioid painmedication, is used only for treatment of breakthrough pain in cancerpatients receiving opioid treatment and who have become tolerant to it.Breakthrough pain is intense increases in pain that occur with rapidonset, even when opioid pain-control medication is being used.Patients who take narcotic pain medications daily and around-the-clockdevelop tolerance and are more resistant to the dangerous side effectsof these medications than patients who take narcotic pain medication ona less frequent basis. 

The deaths reported were the result of improper selection of patients, dosing, or improper product substitution.

“FDA is monitoring this issue veryclosely,” said Steven Galson, M.D., M.P.H., director of FDA’s Centerfor Drug Evaluation and Research. “We are working with the manufacturerto ensure the safest use of this medicine. Health care professionalsand patients need to be aware of the potential for fatal overdose withthe improper use of Fentora.”

In its Public Health Advisory andHealth Care Professional Sheet published today, FDA warned physiciansand other health care professionals that it is critical to followproduct labeling when administering Fentora. FDA further stated that itis dangerous to use Fentora for any short-term pain such as headachesor migraines. It is critical that Fentora not be used in patients whoare not opioid tolerant. 

Patients also must be under a doctor’scare and close supervision while taking Fentora and the dose should becarefully adjusted to control breakthrough pain adequately.

In addition, FDA is concerned about theimproper substitution of Fentora, a quick acting pain drug, for otherpain medicines.  Fentora is not the same as other fentanyl products andcannot be substituted for Actiq, another fentanyl product used to treatbreakthrough cancer pain. Because Fentora delivers more fentanyl to theblood than Actiq, substituting Fentora for Actiq using the same dosecan result in a fatal overdose.

On Sept.10, 2007, Cephalon Inc., themanufacturer of Fentora, sent letters to physicians and other healthcare providers advising them about the adverse events and deathsreported for Fentora. FDA is reviewing available information includingadverse events. The agency has asked the company to strengthen warningsand improve the dosing instructions in the drug’s product labeling.FDA also requested that the company improve their education plan forprescribers and pharmacists on the proper patient selection, dosinginstructions and restrictions on substituting Fentora for otherproducts.

Adverse events related to this product should be reported to MedWatch, the FDA’s voluntary reporting program: www.fda.gov/medwatch/report.htm

There can always be some activist group activity here, or at least that is what incoming emails received have stated.  Some sent in to us listed "the first of many" and "Many more to come."  We’ll see if that creates some movement or not. Options are still fairly active in the open interest with over 154,000 contracts in the August $7.50 Calls and over 129,000 contracts in the $7.50 puts.  That huge open interest drops off a cliff in the near-months after this as no new FDA data is really expected.  An at-the-money straddle right now only looks like it costs $0.70, lower than in any recent month.   

All of these following issues are already known and already in the news, but on top of earnings the company is going to address the following:

• The Company received confirmation that the U.S. Food and Drug Administration will accept either a positive interim or final analysis of survival from its ongoing IMPACT study to amend the Biologics License Application for Provenge® (sipuleucel-T), its investigational active cellular immunotherapy for metastatic, androgen-independent prostate cancer.
• The Company continues to have strong patient enrollment in its Phase 3 IMPACT study, which is on track for completion of enrollment this year.
• The Company completed a financing that resulted in gross proceeds of approximately $85 million from a convertible senior subordinated notes offering.
• Presented data from an analysis of Phase 3 Studies (D9901 and D9902A) that showed a prolonged survival benefit for patients who were initially treated with PROVENGE who then went on to receive docetaxel chemotherapy after disease progression.

Obviously if there is any new development out of the FDA or if the company decides it wants a partner that will be key to watch over anything else.  We previously noted how shares may face a news vacuum through much of summer and that looks like it has been the case as trading volume has dropped and volatility in the stock has disappeared.  What we will be looking at the closest is the company’s current and projected cash burn rates since it secured the recent financing package and announced its reduced cost structure. 

This one has been eerily quiet of late as far as any real news out of the company.  We’ll follow up if there are any substantial changes ahead of the release. 

Jon C. Ogg
August 3, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

When traders made bets and saw a move of more than 200% at one point onFriday in Dendreon (DNDN), this is the sort of news that can getbiotechs with upcoming events (and even some of the old dead biotechzombies) going.  Don’t be shocked when you look back to Friday or evenover the next two weeks as traders are parsing through trades to findwhat could be the next mover like Dendreon (DNDN).  Before readingfurther, understand that trying to look for a 200% gainer is not thenorm and trying to predict a gain or loss of anything remotely close tothis in a biotech company is one that even industry and corporateinsiders have charred their fingers on many times. 

But what can be done is looking out on the horizon as far as optionstrading and open interest is telling you, and this will at least give ashot to see where some of the smart money and aggressive traders areplacing some bets and where they see a big potential move down theroad.  Medarex Inc. (MEDX-NASDAQ)is one of those names as one of the upcoming biotech review stocks towatch.  This is already a battleground stock as traders have placedbets in favor and against this name, just like they did in Dendreon,and the short interest has risen.  The company’s financials have beenleft off for a space-saving since this is already a long note, but theyhave ample operating capital and partnerships that should keep themgoing for years.  The short interest grew from 13 million shares inFebruary to 16.7 million in March, and its market cap is almost $1.6Billion.  At a $12.72 close MONDAY, shares are in the middle of a $8.51to $16.23 52-week trading range; shares have been significantly higherand lower over the last 10 years and more.

The one thing that may be different in Medarex (MEDX) is that if anyits candidates turn out to be duds, they have a substantial pipelineand a broad group of diverse partnerships that may generate revenues onan ongoing basis.  As you will see later, the partners are impressiveand they are in Phase II and Phase III in more than one candidate.  Itsprimary focus is in monoclonal antibodies to make potential drugdevelopment much faster and less expensive.  Cancers are the primarytargets here, but if you read on you will see they have many othertargets as well.  The company has two kep approaches:  (1)collaborative partnerships with partners to jointly generate, developand commercialize human antibody products (more than a dozencollaboration partners as of 2006); (2) out-licensing partnerships tolicense its human antibody generation technology to partners inexchange for license fees, milestone payments, and royalties (claimstwo dozen partnerships here).  MEDX lists Abbott (ABT), Amgen (AMGN),Centocor-J&J (JNJ), Eli Lilly (LLY), MedImmune (MEDI), Novartis(NVS), Novo Nordisk (NVO), Pfizer (PFE), and Schering Plough (SGP) aspartners as of 2006.  Here is the list:

MDX-010 Phase III for Melanoma and other cancers with Bristol-MyersSquibb (co-promotion/profit share); was granted "Fast Track"designation in 2004.
CNTO 148 & CNTO 1275 for inflammation both in Phase III with J&J’s Centocor (milestones/royalties).
HuMax-CD4, CD20, and EGFR in Phase III’s for cancers and lymphomas with Genmab/Serono (equity interest).
MDX-066 and MDX-1388 in Phase II for C. difficile Disease with MBL (co-development).
MDX-060 in Phase II for Hogdkins and other lymphomas (wholly owned).
AMGN Antibody #1 in Phase II for undisclosed treatment with Amgen (milestones/royalties).
MDX-018 in Phase I/II for undisclosed treatment with Genmab (co-development).
CNTO 95 in Phase I/II for Cancer with J&J’s Centocor (milestones/royalties).

The company also has numerous PHASE I studies going on (partner name,then treatment indication): Celldex for cancer, wholly-owned study forUlcerative Colitis, PharmAthene for Anthrax, MedImmune for Lupus, OnoPharma for cancer, Novartis for Autoimmune diesease, more undisclosedstudies with Amgen and with Eli Lilly, Bristol-Myers for cancer,Imclone for cancer, and more partnerships or wholly-owned candidates. 

Medarex has upcoming presentations May 2-4 at the Morgan Stanley GlobalHealthcare Unplugged Conference and May 22-27 at the CitigroupHealthcare Conference.  It has also recently begun a Phase I clinicaltrial for the potential treatment of Psoriasis and just last week notedsome positive activity in its primate study to potentially treatAnthrax.  Anthrax is a potential win for the company, but its pipelinein Phase II & Phase III studies is what you want to focus on.  Anumber of these could become blockbuster drugs, and Medarex operates asa royalty company that would collect fees if these go to market.

2007 is the potential pivotal year, because it has two BLA’s to befiled this year and next and has numerous updates coming in Phase I andPhase II trials (plus all of the preclinical candidates).  This isn’twithout problems: it is in need of some steadiness in leadership and inits SEC filing history.  We should have more detailed information onits phase II & III studies for melanoma later this year.  The popup in the stock from the Anthrax preliminary results was probablymagnified because traders saw Dendreon go up 200%, but this stressesthe forward "wild cards" that can be catalysts.  The problem is thatthe data, filings, and news may come "later this year" or any of it canbe delayed.  Traders are betting on "later this year" if you look atthe options open interest.

The May CALLS had over 50,000 contracts in the open interest and thesame PUTS were only about 28,000 spread out.  It is quiet for thesummer and in NOV07 PUTS/CALLS, but if you go out to JAN2008 you willsee that the bets are on.  And they are on big time.  Look at theJAN2008 open interest levels:

An at the money straddle ($12.50 strikes) out to JAN08 would run youroughly $5.65 right now, so you don’t have to claim where you think thestock will trade in 8 months to be able to recognize severe volatilityis being priced into the stock.  The "positive Anthrax news" was notpriced ahead of time in last Friday, but that isn’t even one of theimmediate candidates that could be the homerun or flop that traders arebetting on.

We can’t predict that the price action will be anywhere close toDendreon’s move.  It would be reckless.  But what is fair to say isthat if you look at the open interest in the JAN08 PUTS & CALLSthen you will be able to tell that there are many bets that Medarexcould see some of the same sort of anticipated action.  DNDN was"only"pricing in a 50% to 60% move based on last week’s option trading rightup to the stock halt, but that was merely a snapshot and you can’t usethe math as gospel.  That’s what we are seeing here in Medarex with aless certain date. Talk about time value.

We’ll be following up on this one as we get closer and closer and as wesee more news and research this year.  We operate on a two-way streetso any outside data or information that is factual or able to beconfirmed will be welcomed.  This was one we initially saw 10 days agoin a preliminary option screen, and constantly look at many of these tosee if there is value that can be added.

Jon C. Ogg & the 24/7 Wall St. , LLC Team
April 2, 2007

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This weekend, Barron’s has run its cover story on which companies may stand to win in the medical war against Alzheimer’s Disease.  This really only scratches the surface of this devastating problem,even though it is addressing the pipelines that may yield newtreatments.  Barron’s notes drugs that may be able to treat the disease rather than just the symptoms in the next two years.  The article still does a good job to point out the current treatments and some of the companies that have studies that have either completed or being close to completion.   

Wyeth (WYE-NYSE) was the one noted as the best investment bet in the cover story article from Barron’s, which also was noted at the biggest discount to peers. Barron’s also notes: Neurochem (NRMX-NASDAQ) out of Canada, Elan (ELN-NYSE/ADR) in Ireland (and US) (with mixed results in recent years), Novartis (NVS-NYSE/ADR) is Switzerland (And US and elsewhere), Pfizer (PFE-NYSE), Forest Labs (FRX), Eli Lilly (LLY-NYSE), Johnson & Johnson (JNJ-NYSE) were all noted with currently "on the market" drugs in the ongoing studies for possible Alzheimer’s treatments in some form or fashion.  The current drugs from J&J, Novartis, Forest and Pfizer are really meant more as slowing-agents rather than cures.  Unfortunately, there is no magic pill that just zaps this disease.

Neurochem (NRMX) mentioned in the Barron’s article is in Phase III studies in Europe and recently completed Phase III’s in North America for its Alzhemed(TM). It has already filed to raise $102 million in aggregate securities and its balance sheet indicates it may need more cash again at some point in the near future.  This one is perhaps one of the more leveraged names in the article.

Myriad Genetics (MYGN-NYSE) has just completed enrollment ofpatients in its global Phase 3 clinical trial of Flurizan(TM) inAlzheimer’s disease, the first in a new class of drugs known asSelective Amyloid Lowering Agents (SALAs).  This was also noted briefly in the Barron’s article, but these results look promising so far even though the interim results are not planned and results will be unknown until next year.

Forest Lab’s (FRX-NYSE) fiscal March 2006 saw $505 million of $2.96Billion total sales come from Namenda (R) (not Manenda), which was approved in 2003 asan Alzheimer’s treatment.

AstraZeneca (AZN-NYSE) and Targacept (TRGT-NASDAQ) are in Phase II’s for AZD3480 to stimulate the brain’s memory neurotransmitters.

BUT…..there are many more companies here that need to be given some attention.  This is a huge field and there are many mid-cap and small-cap stocks that can be huge beneficiaries of this.  As we have said the Barron’s article is incomplete, and the same will obviously be true here because there are so many aspects to the story.

Our own Douglas McIntyre pointed out several nursing home and assisted care facility operators just on March 20, 2007 after the Wall Street Journal ran an article about the boomers reaching retirement age and the long-term forecasts in the dementia epidemic.  The facilities Doug noted there were Senior Housing (SNH-NYSE) (a REIT), Sunrise Senior Living (SRZ-NYSE), Brookdale Senior Living (BKD), Assisted Living (ALC-NYSE), and Manor Care (HCR).   There are many, many others worth note that have the potential to benefit from this.

Emeritus Corporations (ESC-AMEX) is a national provider of assisted living and Alzheimer’s and related dementia care services to senior citizens.  After the acquisition of Summerville Senior Living announced this last week it will operate 284 communities in 36 states comprising 24,448 units with a capacity for over 28,000 residents. Summerville is adding 81 communities comprising 7,935 units in 13 states which provide independent living, assisted living, and Alzheimer’s and dementia related services to seniors.  This one is more of a pure-play in the assisted living sector, but keep in mind that its stock ran up on this acquisition and its earnings has been spotty.

Nymox Pharmaceutical Corporation’s (NYMX-NASDAQ) in Canada holds some patent rights for statin use for the treatment and prevention of Alzheimer’s disease, so some of these larger statin makers could theoretically end up shelling out some royalties down the road.  Will they really?  Who knows, that’s a long-term issue. 

Icagen, Inc. (ICGN-NASDAQ) has potential candidates as lead compounds for dementia, including Alzheimer’s disease, for which the Company’s collaborator Astellas Pharma Inc. is conducting preclinical studies, and lead compounds for attention deficit/hyperactivity disorder, which were derived from the collaboration and for which the Company is conducting preclinical studies.

Memory Pharmaceuticals (MEMY-NASDAQ) just raised cash ($10M) to help fund its pipeline studies.  These conditions include Alzheimer’s disease, schizophrenia, bipolar disorder and depression.  This one recently saw its stock implode when its MEM1003 failed to show its effectiveness in acute mania in bipolar disorder, and this MEM1003 is actually being studied for Alzheimer’s.  We noted this at the time, so they better hope for better luck there on the new indication.

EPIX Pharmaceuticals (EPIX-NASDAQ) has a compound PRX-03140 which is in a Phase IIa clinical trial in Alzheimer’s disease.  Siemens (SI-NYSE/ADR) an agreement with Wyeth Pharmaceuticals to utilize Siemens’ new research imaging agent in Wyeth’s clinical studies of new therapies in development for Alzheimer’s disease.

Eisai Co. Ltd (ESALY-NASDAQ/OTC) has increased its research facilities in the US and is studying E2012 in preliminary Phase I of its gamma secretase modulator that is being evaluated as a potential new treatment for Alzheimer’s disease.  Merck (MRK-NYSE) and Martek Biosciences (MATK-NASDAQ) are each studying seperate tests (not related to each other).

Even in 2000, the Biotechnology Industry Organization estimated that in the United States alone the total cost of Alzheimer’s Disease was approximately $100 Billion per year.  Healthcare costs haven’t been static by any means, so you can take that number on up drastically from there.  After getting to witness on multiple personal occasions the devastationAlzheimer’s and Dementia causes to the patient, their finances, and theimpacts it has on immediate family, this is a topic of personalimportance and interest.  I have added on to the article because thisis a far reaching issue where it doesn’t really seem like one miraclealone is going to be a true cure that eradicates what is by no meansshort of an epidemic as we live longer and longer.  It is estimatedthat 5 million people in the United States alone are living withAlzheimer’s Disease.

Jon C. Ogg
March 31, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.