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Biotech / Medical : Biotech Valuation

CRSP 63.99

+4.7%

Oct 31 9:30 AM EST

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To: John Metcalf who wrote (7623)	12/28/2002 5:59:49 PM
From: A.J. Mullen	of 52153

You see, when Dendreon analyzed the entire population in the study -- i.e. patients with any and all Gleason scores -- they could not tell the FDA with better than 95% confidence the treatment effects shown by Provenge were due to the drug and not random chance. All they could manage was 94% confidence. To be precise, the 95% confidence refers to the probability that one would attain differences in the statistics between the control and experimental as great as those found if the protocol had no effect. 95% is arbitrary, but customary. Using it is accepting that there is a one in twenty chance that a drug will be disgarded for having no significant effect when in fact more testing would show that it did have such an effect. If there had been one more subject in the experiment the "% confidence " would have been greater or less than 94%. Perhaps it would have been above the criterion, but it's just as likely that the margin of failure would have been greater. The time to set boundaries of acceptability is before the experiment. The company would have had the opportunity to argue that less stringent conditions should apply before agreeing on the protocol. They could also have included more subjects which would have made the experiment more robust. It is totally spurious to take a sub-group for which the numbers look good and say that these pass the criterion. If the group between two and seven on the Gleason scale had not "qualified" would they have partitioned the group further? Anyone can see the ridiculousness of claiming, "for patients at 2, 5 & 7 on the Gleason scale we have proved that the difference to those to whom we gave the drug is greater than would be expected by chance." What the company was trying on is almost as shaky. Ashley

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