Pharma's Refreshing Bad News

Now here's a refreshing change. Two pharmaceutical companies presented data at scientific meetings over the weekend about drugs that failed their clinical trials. They even put out press releases to announce the presentations. Yet I'd call this news anything but a reason to sell your shares.

Investors usually hear little about failed drugs. They sometimes just die a quiet death, without investors ever realizing they've been removed from the pipeline. Getting a full scientific presentation about how and why these compounds failed is just a bonus.

At the American College of Cardiology meeting this weekend, Schering-Plough (NYSE: SGP  ) presented data for its antiplatelet drug, Integrilin. The drug is already approved for patients undergoing an angioplasty, but Schering was hoping to get it approved as a routine treatment earlier in the procedure. No such luck. In a double whammy of bad news for investors, using the drug early didn't reduce deaths, and it actually increased the chance of severe bleeding.

Eli Lilly's (NYSE: LLY  ) presentation on mGlu2/3 at the International Congress on Schizophrenia Research wasn't quite as straightforward. The drug looked promising, with a better side effect profile than current treatments such as AstraZeneca's (NYSE: AZN  ) Seroquel, Pfizer's (NYSE: PFE  ) Geodon, and Johnson & Johnson's (NYSE: JNJ  ) Risperdal. But in a trial comparing mGlu2/3 to Eli Lilly's currently approved schizophrenia drug, Zyprexa, mGlu2/3 didn't perform any better than placebo.

But -- and this is important -- the already approved Zyprexa didn't beat the placebo, either. In this case, it's likely that the placebo group is the outlier. Better-than-expected performance from placebo groups is unfortunately fairly common in drugs that treat indications such as pain, depression, and schizophrenia. Eli Lilly will be running another phase 2 trial to confirm whether this was just a fluke.

The more information we investors can get, the better. In that spirit, I applaud both companies for coming clean about their failures. Here's hoping we can look forward to more examples of this sort of honesty.

Further potentially failure-filled Foolishness:

Johnson & Johnson is a Motley Fool Income Investor selection. To see how dividend-paying stocks can offer both secure income and the opportunity for growth, take a free look at this newsletter with a 30-day free trial. 

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is an Inside Value recommendation. The Fool's disclosure policy tries, tries again.


Read/Post Comments (1) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 01, 2009, at 5:25 AM, DannyHaszard wrote:

    Please do a report on how Lilly's (NOW $4.6 billion) propaganda payout is a fraud,as a matter of fact 8 Lilly employees who are supposed 'whistleblowers' are getting $ 10 mill each the real victims like me are being ignored.

    They have three certified letters from me substantiating my claim. I am a classic case for compensation having taken the stuff for four years (for off-label PTSD) 1998-2000

    I paid thousands of dollars out of my own pocket in co-payments for the Zyprexa which gave me sudden onset diabetes in 2000 with a deadly A1C of 14.2

    --

    Daniel Haszard-http://www.zyprexa- victims.com/

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 864556, ~/Articles/ArticleHandler.aspx, 11/22/2014 7:15:49 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement