Biotech investors are notorious for overreacting to positive data from small clinical trials. "If it works in a few patients, it should work in a larger trial" is a reasonable hypothesis, but it's not a fact.
Apparently overreacting to negative news from a small trial is possible too, especially for a company like Gilead Sciences
All eight were null responders to Roche's Pegasys or Merck's
And the treatment with GS-7977 wasn't exactly optimized; the drug was dosed by itself for just 12 weeks. Incivek is dosed for only 12 weeks, but null responders remain on peginterferon and ribavirin for that time as well as an additional 36 weeks.
The only thing we can fault Gilead -- or Pharmasset, really, since they designed the trial before Gilead purchased the company – for is being so cocky as to think that the drug would work as a single agent, on a hard-to-treat population, for a short period of time. But of course, that's why the company tried it on a small number of patients in the first place.
The solution is to combine the drug with others into a cocktail and perhaps dose it for longer. GS-7977 is already being tested in combination with Johnson & Johnson's
Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Gilead Sciences, Johnson & Johnson, and Vertex Pharmaceuticals; and creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.