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Biotech / Medical : Biotech Valuation

CRSP 53.00

-6.4%

11:37 AM EST

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To: Mike McFarland who wrote (49)	3/7/1999 5:19:00 PM
From: Biomaven	Read Replies (1) of 52153

Actually, the statistics on success at different Phases are quite relevant to the relative valuations of different stage companies. The numbers from the FDA site that I quote below seem to me too high for Phase III success - maybe because they are distorted by big pharma "me too" drugs; maybe because the biotechs generally have more ambitious and/or flakier drugs in Phase III than do the big pharmas - partly a reflection of lack of needed culling of projects by the small biotechs. Here are the statistics: Phase 1 Number of Patients: 20-100 Length: Several months Purpose: Mainly safety Percent of Drugs Successfully Tested: 70 percent Phase 2 Number of Patients: Up to several hundred Length: Several months to 2 years Purpose: Some short-term safety but mainly effectiveness Percent of Drugs Successfully Tested: 33 percent Phase 3 Number of Patients: Several hundred to several thousand Length: 1-4 years Purpose: Safety, dosage, effectiveness Percent of Drugs Successfully Tested: 25-30 percent For example, of 100 drugs for which investigational new drug applications are submitted to FDA, about 70 will successfully complete phase 1 trials and go on to phase 2; about 33 of the original 100 will complete phase 2 and go to phase 3; and 25 to 30 of the original 100 will clear phase 3 (and, on average, about 20 of the original 100 will ultimately be approved for marketing). taken from fda.gov Peter

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