New American Psychiatric Association Prez: We Want Money

In a recent speech, incoming American Psychiatric Association president Alan Schatzberg was quoted as saying:

"As the recent attacks on APA and leaders of the profession have occurred, it has struck me that some of the detractors in the press have voiced concern that some folks have earned too good a living, often by doing presentations," he said. "I have heard from colleagues and directly from one reporter asking me about one of my colleagues having too high an annual income. I can assure you these detractors would not ask the same question of a surgeon or radiologist earning 10 times the amount paid our colleagues. None of us do what we do for money. Yet, it is also time for us to realize that our members and residents have never taken vows of poverty, and the complexity of the work deserves to be recognized. We need to ask ourselves how we have contributed to our own devaluation with which others seem to resonate, and we need to reverse the course. The rewards for our dedication should not be limited to a sense of pride, but we are also entitled to be paid commensurate to the challenge.

So Schatzberg must be diving into dumpsters, begging at interstate off-ramps, and the like. Oh, wait a minute. This is the same Alan Schatzberg who in 2007 owned close to 5 million shares of Corcept (which translates into roughly 5 million dollars). I have no idea how many shares he owns currently. Corcept, in case you missed it, has shown its drug mifepristone (aka RU-486: "The Abortion Pill") is ineffective in relieving depression among patients with psychotic depression. Schatzberg, at one time, was the chief scientific officer of Corcept and was also the cofounder of the company. According to Corcept's website, he is still a scientific advisor. Despite the stuides of mifepristone showing negative results, the results were spun in a manner to make them sound as if they were positive (1, 2, 3, 4). In a press release, Schatzberg was quoted as saying that mifepristone "may be the equivalent of shock treatments in a pill." Right, with all of the negative studies, it's definitely shock treatment, meditation, and running a marathon all wrapped together in a capsule. Should he be paid "commensutate to the challenge" of trying to weave positive findings from negative results? I don't know what role, if any, he played in the misleading publications surrounding mifepristone. But in his role as chief of the scientific advisory board, I'd venture a guess that he had some involvement. But worry not, the negative results were not spun into positive findings for the sake of money, but for an altruistic love of patients with depression. I'm touched.

Schatzberg was also busted by yours truly putting his name on a duplicate publication that pimped Cymbalta, Lilly's antidepressant. The study presented data from the same set of patients who were involved in a previously published Cymbalta study. Scientific results are not meant to be published in nearly identical form in two different journals. But that didn't stop Schatzberg and his coauthors. If you've not read the lengthy post on this topic, please feel free to check it out in order to understand my cynicism regarding his recent speech.

Another quote from his talk:

We need to sit down with industry and come up with ways of interacting that are acceptable to both sides and fit with future guidelines. I have pledged to follow up on recent initiatives and work with Dr. Scully [APA's medical director] and our Board of Trustees to effect a new partnership—a partnership we can be proud of for what it contributes to the well-being of our patients and our profession.

I can only wonder what type of mutually agreeable interactions would meet Schatzberg's standards. Duplicate publication, serving as a scientific advisor for a company that writes scientifically dubious papers? And it appears that he's encouraging psychiatrists to be greedy -- take the money and don't feel bad about it. Taking industry money is perfectly acceptable in some instances, but it needs to be transparent, and there are plentiful examples of academics getting paid by industry and slanting science in a sponsor-friendly way.

And the clincher:

"The time has come," he said, "to be proud of what we do and to advocate for what we and our patients justly deserve."

Right, psychiatrists deserve to make as much money as possible bending science for corporate sponsors -- and they should be proud of it too. Am I being too cynical? Maybe. But when a guy with Schatzberg's record starts talking about psychiatrists needing to rake in more money from industry, it makes me think I'm living in Bizarro World. Get ready, APA memebers; it's going to be an interesting ride.

Iloperidone: Vanda Shareholder Train Wreck

Many months back, when shares of Vanda Pharmaceuticals were going for 29 bucks, I warned y'all: Their main product, iloperidone, showed all the signs of being a dud. It has been in the clinical trials stage of development for about a decade and it had yet to receive FDA approval. Um, if a drug was of significant benefit, do you really think it would have been in late-stage development for 10 years? In December 2006, I wrote:

As for iloperidone, one article forecasted that it would hit the market in 2001! Further digging indicated that Titan, which holds the license for iloperidone (to some extent, anyway), was in a spot of trouble for allegedly hiding the drug’s side effect profile. In 1997, according to a report filed with the SEC, “the Company does not have the funds necessary to complete the clinical development of Iloperidone and is currently pursuing several financing alternatives including corporate partnering arrangements and off balance sheet financing to complete development of Iloperidone.” I assume this is where Vanda got involved. I could find not a single published trial of ilopderidone in either PubMed or Clinicaltrials.gov. If anybody can direct me to clinical trials data for this product, I’d love to see it! So this drug has been in the clinical trials phase of development for nearly a decade, and there is no published data to show its efficacy. I’m not impressed.

My personal opinion is that you are better off burning your money than investing in Vanda after the huge jump earlier this week.

Now, according to Reuters, Vanda received a not approvable letter from the FDA "over concerns of efficacy" regarding iloperidone in the treatment of schizophrenia. Ouch. This after the drug was ludicrously named "Fiapta," then "Fanapta." Hello?? Vanda shares can now be had at about a dollar per share -- down about 95% from when I initially warned everyone to steer clear of the company's stock.

There is always a chance that the FDA has a change of heart; it's possibly even worth buying at this point, as even obvious dogs have their day on the market occasionally, such as Corcept Therapeutics. I have no faith that any of Vanda's products are worth anything clinically, but I think they might be able to BS enough analysts and investors to help drive up the price up a few bucks per share. Note that this is not official investment advice.

Conflicts, Bad Science, and Corlux

Recently, the watchful eyes of Charles Grassley have been peering into the bank accounts of big name psychiatrists. Melissa DelBello and Joe Biederman (1, 2) from the Wonderful World of Child Bipolar were first, and now Alan Schatzberg has been hit. Schatzberg is the Chair of Psychiatry at Stanford University. He is also the President of the American Psychiatric Association. In other words, he's kind of a big deal.

Pharmalot hits the details, but the gist is that Schatzberg is deeply involved at Corcept Therapeutics, a company for which he is chair of the scientific advisory board and holds a large amount of stock. According to Grassley, he did not disclose some of his stock sale profits or the magnitude of his multimillion dollar stock holdings in the company. Additionally, Schatzberg allegedly underreported income received from other drug companies. It appears that Schatzberg was not really required to disclose some of this information, so according to my brief review of the information, it is quite possible that he has broken no rules. Now, whether the rules need to be changed is a different story. No offense to Grassley, but I was well ahead of him on part of this story, noting in April 2007 that Schatzberg had a mega-conflict of interest going with Corcept. I also noted previously that Schatzberg was on the Zyprexa bandwagon, helping to "educate" fellow physicians about the Lilly wonder drug.

The Real Problem: But amidst all this discussion of conflicts of interest, I am afraid that we are getting a bit diverted from the main problem, that of shoddy science. It is admittedly interesting noting that Schatzberg is somehow supposed to be an independent, disinterested scientist while standing to make an absolute truckload of money if his sponsored product succeeds. But it runs deeper. While Schatzberg is a bigwig at Corcept, let's review how Corcept's main product mifepristone (RU-486; yes, the abortion pill) has done.

Mifepristone (aka Corlux) is intended to work as a treatment for psychotic depression. One main problem: It doesn't relieve depressive symptoms. In multiple trials, it has failed to demonstrate antidepressant properties. The CEO of Corcept and another member of their scientific advisory board have previously tried to spin away such inconvenient data by painting negative results as positive. To give Corcept credit, their scientists are consistent spinmeisters, seemingly always able to dredge a positive from obviously negative findings. Schatzberg has been an author on a couple Corlux-related papers that were shredded by independent analysts, who found statistical problems and overly optimistic interpretations of the study results. As the senior member of the Scientific Advisory Board, I assume that Schatzberg had some input on the other study reports that also overstated the efficacy of Corlux.

Could his millions of dollars in Corcept holdings bias Schatzberg, either subconsciously or overtly? You be the judge. But remember that this is not just about conflicts of interest -- this is about science. There is hard evidence that the research on Corlux, which is tightly linked to Schatzberg, has been misinterpreted for the sake of marketing. Conflicts of interest sometimes lead to bad science, but rather than focus just on conflicts of interest, we need to dig a layer deeper and see the poor science -- the shoddy evidence that is used as the foundation for "evidence based medicine" in many cases.

Note also that David Healy has written an interesting piece on the topic of conflicts of interest and bad science, pointing out that a larger problem is lack of access to company-owned data. Think Paxil and suicide. He concludes:

If I were employed in a company marketing department I would much prefer to have the field think that all that is wrong is that a few corrupt academics fail to declare competing interests than to have the field think that company practices that restrict access to data while still claiming the moral high ground of science are the real source of the problem.

I'd love to know what American Psychiatric Association members think about this. The news had already broken about Schatzberg overstating the efficacy of Corlux before he was elected APA president. Do APA members not care that their president has a documented record of putting product promotion before scientific evidence?

4.83 Million Reasons to Be Conflicted

Corcept Therapeutics just got an infusion of cash. From the press release:

Corcept Therapeutics Incorporated (NASDAQ: CORT) today announced the completion of a private placement of 9,000,000 shares of its common stock at a price of $1.00 per share, pursuant to a definitive agreement entered into today with accredited investors. The investors are led by Paperboy Ventures LLC, who is currently a significant shareholder of Corcept. Sutter Hill Ventures, Alta Partners, LLP, venture capital firms that are currently significant shareholders in Corcept, and members of the Corcept Board of Directors, Joseph C. Cook, Jr., James A. Harper, David L. Mahoney, Alan F Schatzberg, M.D. and James N. Wilson, are also investors. In addition, investors in this financing round included Black Point Group, LLP, Vaughn Bryson and Daniel Bradbury.

Already a good short-term investment, as the stock is now at $1.21 a share. If you've read my prior writings about Corcept, you can see that I'm highly skeptical about it's main product, Corlux (mifepristone/RU-486), which is aiming to treat psychotic depression. Although the company has tried to spin negative findings as actually being positive, it's hard to see how a series of studies showing poor efficacy will lead to helping patients in any meaningful fashion. Might the latest influx of cash help out the Corcept insiders who hold a major stake in the company? Sure.

Conflicts of Interest: It appears that Dr. Alan Schatzberg bought 50,000 shares in the latest round of funding. It has been reported previously that Schatzberg has written quite positive comments about Corlux in journals and some have questioned whether his financial stake in the company has skewed his judgment on the topic. I want everyone to consider the following conundrum...

Schatzberg holds about 4.83 million shares of Corcept currently. So, if Corlux bombs a clinical trial, is he going to:
A. Immediately report the negative results in a press release
B. Move publishing the negative results in a scientific journal to the top of his to-do list
C. Spin the results in a very favorable fashion (or make sure that someone who writes the press release and/or scientific paper does so)
D. Just bury it entirely (probably not an option with such a small company that likely announces most if not all of its trials beforehand)

If I was in a position where I had such a large financial stake, I'd have a hell of a time doing A. or B. When large dollar amounts are at stake, it's not easy to say, "Hey, this product doesn't seem to work" and watch your stock holdings evaporate. This is why conflicts of interest are a problem.

Some academic researchers really are just in it for the money. I think they are a very small minority. I bet that most researchers who end up with big-time conflicts of interest start off thinking, "Hey, this could be a great new form of treatment for condition X." Then, hey, why not make some money while you're doing God's work, helping to heal people. We're an entrepreneurial society, so we tend to believe that people should be rewarded for having an enterprising spirit. Now, if the product turns out to not be so effective and/or to have some unpleasant side effects, then look at the predicament... Here's the conflict -- help people with condition X or help my own cash flow?

Or say I'm a doctor who makes some good money on the side giving "educational" speeches to fellow physicians about a drug, say, Zyprexa. When I find out that said drug is linked to numerous health problems, do I bring that up in my speeches, knowing fully that such discussion is likely going to get me canned from the speaking circuit?

The list of potential examples could go on for days.

Corcept: We'll Take Our Ball and Go Home

...because we can't afford the basketball court. Corcept, which has run a series of studies (1, 2) demonstrating poor efficacy of its drug Corlux (mifepristone/RU-486) in treating psychotic depression, has watched its chief financial officer resign (way to get off the sinking ship Fred!) recently. Corcept also stated in a press release that...

For the fourth quarter of 2006, Corcept reported a net loss of $3.9 million, or $0.16 per share, compared to a net loss of $5.2 million, or $0.23 per share, for the fourth quarter of 2005. For the full year 2006, the company reported a net loss of $24.9 million, or $1.09 per share. This compares to a net loss of $20.1 million, or $0.89 per share, for the full year 2005.As of December 31, 2006, Corcept had cash, cash equivalents and marketable securities of $9.5 million. The total cash used in the company's operating activities for the full year 2006 was $23.2 million. Commenting on Corcept's financial guidance for 2007, Fred Kurland, Corcept's Chief Financial Officer, stated, "Based on the currently planned timeline of our clinical development program and assuming that we are able to raise funds for intended operations, we expect that net cash used in 2007 will be between $10 million and $15 million. If we are not able to raise additional funds, we will not be able to continue operations beyond the second quarter of 2007."

Sounds like a plea of desperation to me. Anyone willing to sign up? I'll just get my checkbook out now. Corcept stock (incredibly) was once valued at over $10 per share, and now sits at 71 cents. I guess you could call this an extreme form of value investing (except for the company's lack of earnings). It appears that just issuing press releases and/or writing journal articles that spin their negative findings as positive is not working so well.

Corcept Spins Out

The interesting thing about Corlux (mifepristone/RU-486) is that no matter how it fares in clinical trials, it is always a winner. In the latest trial, Corlux was again not effective on the primary outcome measure, which assessed the psychotic symptoms of psychotic depression. This is not surprising, since it has generally shown mediocre results, which are then spun by the company executives/academics as evidence of treatment effectiveness. Oh, and despite this being pushed as a treatment for psychotic depression, the treatment has never yielded anything resembling efficacy for depression, which strikes me as pretty odd.

Dr. Joseph Belanoff, Corcept CEO, had the following to say about the latest trial results:

While we are disappointed that the trial did not meet the primary endpoint, we are particularly encouraged to have met the important predefined threshold concentration endpoint with statistical significance," said Joseph K. Belanoff, M.D., Corcept's Chief Executive Officer. "This study confirms our previous observation that at higher plasma levels the drug candidate is able to demonstrate desired clinical effects. In particular, those patients in Study 06 who achieved a predetermined level of 1661 nanograms of CORLUX per milliliter of plasma separated from the placebo group with statistical significance.

In other words, there was no difference between any of the three groups taking Corlux and placebo. None. So it appears that they started data dredging (e.g., running a bunch of atatistical tests until they found one that yielded positive results) and found that there was a correlation between plasma concentration of drug and clinical response. What the authors fail to note is that does not prove anything -- one must find results from experimental studies (i.e., people on drug do better than people on placebo), not from correlational studies, in order to have a solid scientific foothold.

An academic, who serves on Corcept's scientific advisory board, was also willing to make a sunny statement about the findings:

Ned H. Kalin, M.D., Hedberg Professor and Chair of the Department of Psychiatry at the University of Wisconsin, said, "The correlation between plasma levels of drug and response rates found in this trial is very exciting. The results of this study show that when psychotically depressed patients achieve a threshold concentration of CORLUX in their system, a rapid and sustained clinical response is likely. This is a strong demonstration of a drug effect in an illness that is potentially devastating and difficult to treat."

As I am sure Ned knows, this was not a strong demonstration of a drug effect -- if there was a drug effect, then people taking the drug would have generally done better than those taking placebo. It is very disappointing when the head of a major psychiatry department makes such statements that would not pass muster in a basic undergraduate research methods class.

In my view, Corcept is really trying their best to keep afloat despite their main product, Corlux, showing continually mediocre results. Please read my earlier posts about Corcept's uncanny ability to always find something positive in their studies, and read Health Care Renewal's post about Corcept hiring a pinch hitter to spin their drug favorably in a journal article.

Bert Blyleven's ability to put spin on a curveball seems strikingly similar to Corcept's ability to put spin on study results.