Criminal investigations chief resigns, things are changing at FDA

 Story from CNBC, written by AP

Please read the full story on CNBC

Link: http://www.cnbc.com/id/40341826

EXCERPT

WASHINGTON - The head of the Food and Drug Administration's criminal investigation unit is stepping down, months after the latest round of criticism directed at his department by congressional investigators.

An agency spokeswoman confirmed Tuesday that Terry Vermillion told FDA staff this week that he would step down.

"We appreciate Terry's years of public service and wish him well in retirement," said FDA Associate Commissioner Beth Martino. Vermillion, who spent 20 years in the Secret Service before joining the FDA in 1992, is among the highest paid officials at the agency at roughly $200,000 per year. His department has been the subject of several investigations requested by federal lawmakers.

Earlier this year the Government Accountability Office said that the FDA must exercise more oversight over Vermillion's unit, which has operated largely independent of agency leadership, despite growing into a $41 million operation with 230 staffers over the last decade. In 2008, House and Senate Republicans questioned the priorities of the criminal investigations unit, specifically its focus on drug abuse cases instead of broader misconduct by large companies.

Improper influence of former Director taints FDA analysis of Lorqess

Excellent post from Investor Village posted by "truth_sayer"

Link: http://www.investorvillage.com/smbd.asp?mb=633&mn=9444&pt=msg&mid=9801323

Improper influence of former Director taints FDA analysis of Lorqess

Dear Ms. Behr and Ms. Kremzer, 

Re: FDA employee improperly influenced by a former FDA director with a financial interest 

Please consider this letter the lodging of a formal complaint with your office and request for remedy. 

Complaint 

I allege that Fred K. Alavi an FDA employee has been improperly influenced by a former FDA director Dr. David Orloff. The result of the influence has to all appearances tainted Dr. Alavi’s work. 

I cite as evidence Alavi’s unprofessional and unscientific contribution to the FDA Briefing document (UCM225631.pdf) for an FDA Advisory Committee meeting held Sept 16, 2010 on to consider the weight loss drug Lorqess. 

To wit: 

1. Arena Pharceuticals’s obesity candidate, Lorqess (lorcaserin) is widely acknowledged potential competitor of Vivus. Inc’s obesity drug candidate, Qnexa 

2 Dr. David Orloff has a financial interest in Vivus. Inc’s obesity drug Qnexa because he oversaw the trials of this drug: 

http://ir.vivus.com/releasedetail.cfm?ReleaseID=407933 

“MOUNTAIN VIEW, Calif., Sept 09, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- VIVUS, Inc. (Nasdaq: VVUS) today announced positive results from two final, phase 3 pivotal 56-week studies, EQUIP (OB-302) and CONQUER (OB-303), evaluating the safety and efficacy of Qnexa(TM), an investigational drug, in more than 3,750 patients across 93 sites……Wilson added, "We are proud of the results of our Qnexa phase 3 program, and I would like to thank Dr. Thomas Najarian, the inventor of Qnexa, the entire development team at VIVUS, Dr. David Orloff and his staff at Medpace, the clinical research organization that managed these studies, and the clinical investigators and patients who participated in the Qnexa clinical trials."… 

3. Immediately proceeding Medpace, Orlof was a FDA director in the very same division that is currently overseeing the review of drugs to treat metabolic and endocrine disorders – including the obesity candidates Qnexa and Lorqess. 

http://www.medicalnewstoday.com/articles/34644.php 

“David Orloff, an FDA division director who oversees the review of drugs to treat metabolic and endocrine disorders, has announced plans to leave the agency and join Medpace, a contract research firm based in Cincinnati that runs clinical trials, the New York Times reports. 

4. During the time of Orloff’s directorship in the very same metabolic and endocrine disorders division, one Fred Alavi was a subordinate reviewer under Orloff: 

http://www.fda.gov/ohrms/dockets/ac/05/briefing/2005-4169B1_02_04-FDA-ClinPharm-Toxicology.pdf 

“….Pharmacology/Toxicology Review And Evaluation…Nda Number: 21-868… 
Pharm/Tox Reviewer: Fred Alavi, Ph.D. 
Pharm/Tox Supervisor: Jeri Elhage, Ph.D. 
Division Director: David Orloff, Md…” 

5. The linchpin of the FDA’s rejection of Lorqess are analyses of trial results conducted by Fred Alavi, that I allege are faulty. See the following: 

6. Dr. Alavi, authored the subsection, of the FDA Briefing document for the meeting to consider Lorqess (UCM225631.pdf) , entitled “Genoxicity and Carcinogenicity Assess ment for Lorcaserin”. 

Page five of that subsection is entitled: “Rat Carcinogenicity Study.” In that subsection the word “carcinogenicity” appears at least four times. Yet the reader of this document discovers that benign, repeat benign, tumor data has been included. Namely, Table 4 of this subsection reports the occurrence of benign fibroademomas even though it is entitled, “Incidence of lorcaserin-induced tumors in the 2 year rat carcinogenicity study.” 

Even worse, the occurrence of these benign tumors have been “combined” with the occurrence of malignant tumors to fabricate an ostensible statistically significance (“SS”) for carcinogenicity. It is only valid to group benign and malignant neoplasms of a particular histogenesis when malignancy is seen as a progression from the benign tumor. Cf. Preclinical Development Handbook Toxicology 2008 John Wiley & Sons New Jersey Carcinogenicity Studies 424- 455. And “ malignant transformations in the epithelial components of fibroadenomas are generally considered rare. The incidence of a carcinoma evolving within a fibroadenoma was reported to be 0.002% to 0.0125%."(Ron Greenberg, MD,1 Yehuda Skornick, MD,1 and Ofer Kaplan, MD: Management of Breast Fibroadenomas, J Gen Intern Med. 1998 September; 13(9): 640–645). 

The incorporation of non-progressing benign tumor results in a conclusion about carcinogenicity is incorrect, unscientific and ridiculous. 

6. Dr. Alavi furthermore “cooked the books” against Lorqess by disregarding monkey brain-to-plasma ratio partitioning data to ascertain brain concentrations of Lorqess. He instead compared plasma drug levels between rats and humans. The safety margin using the primate brain-to-plasma model is 17x the clinical dose, whereas the rat plasma-to-plasma model is 5x the clinical dose. This flies in the face of common sense – it is improper and deceptive to use a comparison between rodents and humans when a comparison between primates and human s is available. 

Furthermore, species difference aside, the traditional in vivo brain-to-plasma partitioning ratio is the method of choice by CNS drug discovery programs. The vast majority of CNS drugs were developed using this method and it is still the gold standard in the drug discovery industry. The method proposed by Dr. Alavi was to use plasma-to-plasma levels to determine the margin of safety, which is widely reported as flawed in scientific literature. There is strong evidence that this is an unreliable method due to marked intraspecies variation in drug levels. Thus, the plasma-to-plasma level determination used by Dr. Alavi is an unaccepted method for margin of safety levels. 

8. Dr. Alavi’s failure to use monkeys as the animal model is contrary to science, common sense and longtime industry practice. He founds his disregard on the queasy-sand circular logic that there was no human data. The vast majority of CNS drug discovery programs use animal models, precisely because there rarely are any human brain data -- and because of the proven inter-species conservation of the blood-brain barrier which is the primary obstacle for drug penetration into the CNS. Furthermore, several studies have confirmed that brain tissue binding is comparable across species. It is idiocy to assert genetic rodent neurobiology should be favored for comparative determination over that of non-human primates. Dr. Alavi ignores grade school science that monkeys are much more similar to humans than rats. Duh. Monkeys are the primary animal species used in drug metabolism studies, in HIV and vaccination studies. To disregard their use is unfounded scientifically. 

Remedy requested 

My request for remedy is that any and all requirements in the FDA’s Complete Response Letter issued to Arena Pharmaceuticals on Oct 23, 2010 that are founded on the mistaken and tainted Alavi analyses be waived and retracted. 

Sincerely Yours. 

Analysis of BLOOM-DM results and media bias

Written by Erewenguy from YMB


Analysis of BLOOM-DM results


There are a couple of problems with the media’s stand-alone
interpretation of the valvulopathy data from the bloom-dm trial. The
first problem has been pointed out repeatedly, that although the
difference between the placebo and lorcaserin mean is large, it is the
placebo mean that is out of the ordinary. The lorcaserin mean is
consistent with other trials.

Some have suggested that the 0.5% placebo value should be discarded as
an outlier, but unfortunately, the data are the data. To pick and
choose what data to analyze leads one to pre-determined conclusions.
So the data WILL be included, which is causing so much
hyperventilating in the media.

The real problem then is a problem of perception which results from
bias inherent in comparing real numbers. This is one of the reasons
the field of statistics exists.

I don’t really want to turn this into a statistics lesson, but would
like to reduce some of the “6X INCREASE IN VALVULOPATHY!” panic and to
show that the actual situation is a bit more complicated than 7
patients vs 1 patient.

For rare-event data with non-normal distributions, such as VHD, the
data should be transformed prior to analysis. A typical transformation
is log(N+1), but I don’t know what specific transformation the FDA
requires.  Transformation is performed to reduce type 1 errors, or
mistakenly rejecting a true null hypothesis. In our case, the null
hypothesis is that lorcaserin mean = placebo mean.

Actual raw data comparison is 2.9 vs 0.5 (a 5.8X difference)
Transformed comparison is 0.591  vs 0.176 (a 3.4X difference, using my
transformation value).

To further complicate the interpretation of the raw data, the FDA is
allowing a margin of error value to assess VHD, with the null
hypothesis that lorc mean is not greater than (1.5) x placebo mean.

So the actual comparison is not 2.9 vs 0.5, but 2.9 vs 0.75.
Transformed comparison now becomes 0.591 vs 0.243 (a 2.4X difference)

Even here, we cannot compare actual numbers, but we have to conduct
the statistical analysis to state with a relative degree of confidence
that these 2 values do not differ outside of what might be expected to
occur by chance.

If the FDA has an ounce of integrity, lorcaserin should be rejected if
it is proven to be unsafe. However, if a proper statistical analysis
does not reject the null hypothesis, I would expect that with that
same ounce of integrity the FDA should declare that VHD is not an
issue and we move forward.

I believe that in the cc it was stated that there was no difference
between treatments at P=0.10, and will assume arna’s statistician is
qualified and capable

SEC is MIA? - Letter by J. Bernard LoVerde, Jr.

Copied and pasted in it's entirety from "Current.com", though this is old it is worth reading

Link:

http://www.sec.gov/rules/concept/s72499/loverde1.txt 

or

http://current.com/1ko224c

Date:    01/31/2000  6:21 PM

Subject: Subject:  File No. S7-24-99 Comments
 
To Whom It May Concern:
     
I am a retired member of the Wall Street Community after spending years in the 
Operation & Compliance (as both a senior member and director of both 
departments) sides of NASD member firms.  This included the oversight of the 
trading activities of numerous branches, registered representatives, and the 
actual Trading Departments of the last two firms I worked for.  As part of these
activities I have spent numerous hours reviewing trading operations and 
compliance as well as immeasurable amounts of contact with both NASD and SEC 
regulatory officials.
     
I am writing this to you regarding the above referenced matter as I feel 
compelled to offer my comments on the subject at hand.
     
It is my persona belief that it is of the utmost importance to maintain, and 
strive for, the concept of "fair markets".  To that extent I believe that it is 
absolutely necessary that you level the playing field for the investing public 
with regard to the trading strategy of short selling. 
     
It is time to create, and enforce, a single set of short-selling rules which 
will apply to specialists, market makers, broker/dealers, and the investing 
public.  As such, I urge you to remove what I believe to be the inequitable and 
discriminatory regulations that restrict the public investor's ability to 
short-sell stocks, while providing preferential treatment only
for the market makers and broker/dealers.
     
While I understand that most novice investors do not understand, or appreciate, 
the critical check-and-balance afforded by the action of short selling in the 
exercise of free markets.  Since the industry itself makes no effort whatsoever 
to educate the public with regard to short selling (this is one of the more 
sophisticated investing strategies that they fail on, much less the proper use 
of margin and/or the trading of options), the public is left to draw the 
erroneous conclusion that it is short sellers who should be blamed when a stock 
goes down in price.  
     
Regrettably, this lack of understanding applies most directly to the new 
generation of "do-it-yourself" investors spawned by the proliferation of access 
to information and gossip enabled by the internet. Many treat the  internet as a
tool to generate "momentum" for stocks as though it is a  football game. Rapid 
runups are easily fabricated for reasons having nothing whatever to do with the 
value of the underlying security.  Furthermore, as I know the SEC actively is 
monitoring "chat rooms" on various internet investing websites this should be 
quite apparent to regulatory officials.  It is extremely disheartening when you 
see this in those rooms dedicated to the trading (loosely defined in some 
occasions) of stocks that trade on the NASDAQ Small Cap and/or OTCBB markets. 
In these cases the promoters, and/or the issuers paid posters who hype the 
stock, use the specter of short sellers to soothe the long stock holders who are
being materially damaged when the insiders in these stocks liquidate their 
shares into the buying of the unsuspecting public.  For example, most OTCBB 
investors on these sites are completely unaware that, in the US, you cannot 
short sell an OTCBB stock, yet this blaming of the short sellers routinely 
occurs.  A better educated public would not be so susceptible to this tactic.
     
However, on the flip side, market makers and broker/dealers have rigged the game
so they can play by a different set of rules than the general public and, to 
date, this ha been protected by the regulatory bodies.  These market makers and 
broker/dealers have done this for no other reason than to line their own 
pockets, under the sham of maintaining "fairness" in the market.  Every day, 
market pros short sell IPO's, short sell on downticks, and short sell without 
regard to the availability of certificates, all things done at the expense of 
individual investors, who do not have the right to do the same.  They do it 
quietly, without regulation, and without a requirement for disclosure; often in 
direct contradiction to the public "recommendations" of analysts
from the very same firms which I believe is another area that the regulatory 
bodies should be aware of (for example look at the recent action in AMZN where 
outlandish price targets were placed on the stock creating a price run right 
before the stock pre-announced a financial warning).  The public will be best 
served by administering the markets so that every investor wishing to place 
their own money in an "at-risk" trade be allowed to do so under the same rules.
     
Therefore, I urge you to eliminate current restrictions on short selling, and 
allow the public to sell short by the same rules as market makers.
     
I thank you for your time and consideration and would be more than happy to 
discuss this with anyone on your staff.
     
Sincerely,
     
J. Bernard LoVerde, Jr.

Facebook connections, bad journalism and naked short selling hedge funds

Post is copied from Antisocialmedia.net, "Judd Bagley" is a good journalist

http://antisocialmedia.net/facebook-bad-journalism-and-short-selling-hedge-funds/

Recently, short-selling hedge fund Rocker Partners paid Overstock.com $5-million to settle the lawsuit filed against them in August of 2005. This is a major victory for all public companies targeted by bear raiding hedge funds. But thanks to the unusually skewed reporting surrounding it, chances are you either hadn’t heard about the suit, or were under the impression it was frivolous and certain to fail.
This presentation examines part of the story behind the coverage of the suit, using some innovative methods to explain why what you heard about the suit and its merits likely had little in common with the reality of it.

Another article on current.com titled

Destroying Companies For Profit

http://current.com/news/politics/89439340_destroying-companies-for-profit.htm

If you ever wondered how or why a stock price suddenly drops like a rock on incredible volume, or why executives battle damaging reports in the NY financial press and in analyst reports, see this video. But only if you want to know how Wall Street really works.

Wall Street has a profitable trading strategy that it has been carefully hiding, because it involves the destruction of companies.

Just recently Deutsche Bank was found by the NYSE to have been selling massive amounts of shares it did not have nor deliver over a period of 22 months. This floods the market with "shares" and sucks out investors money - unbeknown to investors - and damages the companies - the more the better. This trading scheme is called "Naked Short Selling". And it is very profitable for those who do it. The more a company goes down - the more they make.

NYSE spokesman Scott Peterson said that Deutsche Bank sold "A LOT.”

But this is just one example of many instances. Wall Street firms and hedge funds carefully hide this activity because it is amoral and illegal. But is is possible because the regulators, while they know about it, do nothing and journalists and analysts help put out the needed messages.

Companies that need access to the markets or bank on their good reputation are choked off this way. It's easy money. Collect investor money, then kill the company.

I added a link to RSS which you can find on top right. Please read facts about Lorqess on Meddy's blog uptheheat.blogspot.com