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Biotech / Medical : Biotech Valuation

CRSP 57.20

+0.3%

2:43 PM EST

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To: James Hutton who wrote (10010)	1/13/2004 11:07:09 PM
From: Biomaven	Read Replies (1) of 52153

"Underpowered" means they needed more people in the trial than they enrolled. Looks to me like there was more variability in outcome than they had envisioned or the effect of the drug is weaker than they had predicted. This shouldn't have happened because they had enough previous trials so that they should have had a good handle on the variability and effect size. Somehow the drug has behaved differently in the three different trials (reminiscent of ALXN). It's something of a warning flag for a Phase III trial if you see multiple doses. By this late stage (this was the third Phase III trial) they should have nailed down what the correct dose was. For an excellent explanation of why you pay a statistical penalty when you have multiple arms in a trial, check out the site below. Basically you are taking multiple shots on goal, and so the "meaning" of scoring a goal is less. graphpad.com My guess is the market is not going to like this result at all (and just looking now at the after-hours move I see it didn't). The FDA statisticians will likely give them a hard time as well. I don't really have a good sense as to what their chances of ultimate approval will be, but it's likely to be a bumpy road. Personally I'd be inclined to wait for the FDA Advisory Committee. My guess is you will be able to buy it cheap on the day the briefing documents are released ahead of the meeting. Peter

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