Neurochem Sets Low Expectations

On Thursday, specialty drug developer Neurochem (NASDAQ:NRMX) made two announcements. One was the timeline for the upcoming release of phase 3 clinical trial data for its Alzheimer's drug candidate, Alzhemed. The other was a change to how its statisticians review the data from the trial.

Neurochem completed the pivotal 1,052-person Alzhemed study in February. The upcoming clinical trial results from this study are expected to be announced sometime in the second quarter, and will determine whether the drug has any chance of achieving marketing approval without the need for more clinical trial work.

Couched in Thurday's press release regarding the study was the announcement that Neurochem's statisticians were making an "adjustment to the initial statistical model, as set out in the statistical plan, (that) would be necessary to provide accurate results."

Yikes! Nothing about that statement appears positive in any way. It sounds as though Neurochem is going to announce study results that aren't so positive; or else the company is prepping investors for nuanced results full of unpleasant data mining or retrospective statistical analysis.

Either way, the more that Neurochem's independent statisticians have to tinker with the data, then the less clean the trial's results will appear in the eyes of the FDA -- even if such a change to the study's data analysis was planned beforehand.

Neurochem's other drug candidate, Kiacta, is currently awaiting an FDA review on an approvable letter response that was submitted earlier in the year. Kiacta has yet to be able to gain marketing approval after failing on its primary endpoint in its pivotal study.

With the Kiacta marketing application, Neurochem is showing the applicability of the first commandment of biotech investing: drugs that fail primary clinical trial endpoints yet still get submitted to the FDA usually do not get approved. It sounds as though we may find out if Alzhemed is set to follow this course of action later in the quarter.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.