Cancer diagnostics company Neoprobe (NYSE Amex:NEOP) has blasted a hedge fund manager’s criticism of its key Lymphoseek clinical trials as “baseless” and inaccurate.
The Dublin, Ohio company said MSMB Capital’s complaints about the trial’s design are “baseless and replete with factual and regulatory misstatements, served under a cloak of legitimacy,” according to a statement.
Last week, MSMB General Partner Martin Shkreli filed a nine-page (pdf) citizen petition with the U.S. Food and Drug Administration that called on the agency to deny approval of Lymphoseek, a radiopharmaceutical that is used by surgeons to identify lymph nodes in patients with breast cancer or melanoma and to indicate whether cancer has spread to a particular lymph node. A source of controversy surrounding the situation is Shkreli’s short position on Neoprobe, which means that he stands to profit from the shares taking a nosedive.
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Shrkeli’s assertions about Neoprobe have prompted widespread backlash from Neoprobe shareholders who — like company insiders who hold Neoprobe shares — have already suffered from the negative publicity Shkreli has generated around the company. The company’s stock has dropped about 30 percent since Shkreli first aired his grievances about Neoprobe in a June 1 blog post at Seeking Alpha.
In mid-day trading Thursday, Neoprobe’s shares were hovering around $3.50. On May 31, they closed at $5.48
Among Shkreli’s charges were that Neoprobe’s clinical trials of Lymphoseek didn’t compare it to the current standard of care for lymph node detection, a combination of radioactive colloid and blue dye. Neoprobe’s studies compared Lymphoseek to blue dye only.
Without including the radioactive colloid, Neoprobe’s studies “reveal no valuable information to clinicians, patients or regulators,” Shkreli wrote in the petition.
Neoprobe said Thursday that Skreli’s point about the colloid “reveals [Skreli’s] fundamental mischaracterization of the facts.”
Because the radioactive colloid in the procedure is used “off-label” — which means the FDA hasn’t approved the product to be marketed for that particular use — Neoprobe has said that it wasn’t appropriate to include the colloid in its study. “The only appropriate comparator in the instant case is vital blue dye,” according to the company.
Neoprobe asked the FDA to deny Shkreli’s petition. It plans to file for FDA approval of Lymphoseek sometime this quarter.
