Re: Investment Small Biotecs/Pharma

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By rhaaby
July 8, 2005

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Hi Cliff,

I always appreciate your input, even when it takes me to task.

As I look back on the last few years I realize how much I have learnt about the unrealistic expectations that surround drug stocks. Discussion board optimists ignore anyone such as yourself who urges caution, 'knowing' that their drug will cure cancer and is bound to gain FDA approval. Does that sound familiar?

Two aspects in particular stand out: (1) the timeline is always longer than one expects; and (2) there is a very poor understanding of the FDA approval process, especially with Accelerated Approval.

I've been lucky. Lucky to have come across a stock at an early stage that continues to show potential, lucky to have been able to deduce a key element of the MOA that had not been published, and lucky to have been mistaken for an oncologist in a particular telephone call. So far, so good, but if anything my research has shown just how much we DON'T know.

I wouldn't buy any developmental company for the next year. Apart from the risk that drug(s) might fail to perform, there is a second hurdle that is not obvious.

The FDA recently ruled that new drugs not only had to beat approved drugs, but those that were commonly used off-label as well. It is about to enforce its rule that Accelerated Approval MUST be followed by a survival study and will do this by demanding that a single study be conducted (with an application for AA made mid-stream). But the big hurdle is this ...

A recent ODAC decision plus the FDA-endorsed design of an upcoming pivotal trial indicate that the FDA may require trial investigators to prove that their patients are truly refractory and absolutely have an 'unmet need'. This means that patients may need to be re-challenged with chemo (and fail) before they commence treatment, with the result that all defense mechanisms will be at peak levels. If so, AA will be VERY hard to get in the future.

So lets say that Applefoot is right, phenoxodiol jumps this hurdle and gets AA after treating the hardest possible patients. As a drug without side effects that evidently shows effectiveness against a wide range of cancer types, it would likely be used off-label and would therefore need to be bettered in survival studies. Yet another hurdle to be jumped.

But phenoxodiol is just one of 399 anti-cancer drugs being developed at last report. There are bound to be a lot of tears, I just hope they aren't mine.

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