The latest issue of Nature Medicine features a recap (freely available) of a study performed by Deloitte about phase 2 clinical trials and the consequences of doing them right. Or wrong. Keep reading below for the full details.
The Deloitte study, led by Lisa Natenson, looked at phase 2 study attributes for drugs that were approved, as well as those that went on to fail in phase 3 or NDA review. Here were the key takeaways - none of which come as a surprise to experienced biotech investors:
These two quotes sum it all up:
"It's not sexy to hang out in phase 2 for three to four years, but that may be best way to develop a drug" - Natenson
"A primary reason for premature advancement to phase 3 is wishful thinking” - Steven Paul of LLY
The results of the Deloitte study also reinforce two tangental laws of biotech investing:
- Among the 64 FDA-approved drugs, phase 2 trials studied a total of 171 patients in an average of 2 different studies.
- Drugs that went on to fail in phase 3 or get reject by the FDA, however, examined just 69 patients in ~1.2 studies per drug.
- Smaller studies did not let companies get to a final outcome any sooner than larger studies.
These two quotes sum it all up:
"It's not sexy to hang out in phase 2 for three to four years, but that may be best way to develop a drug" - Natenson
"A primary reason for premature advancement to phase 3 is wishful thinking” - Steven Paul of LLY
The results of the Deloitte study also reinforce two tangental laws of biotech investing:
- The Adam Feuerstein "market cap" corollary for predicting phase 3 oncology drug trial outcomes.
- The "Zebra's law" phenomenon which has made many appearances on the InvestorsHub Biotech Values board over the years.
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