Last week AtheroGenics (NASDAQ:AGIX) announced that it was resuming clinical trial work with its lead compound, AGI-1067. In March, AGI-1067 failed in a large phase 3 study as a treatment for patients with a recent acute coronary syndrome (ACS). That negative result led partner AstraZeneca (NYSE:AZN) to abandon ship. AtheroGenics' stock is down almost 90% from its 52-week highs.

When the results from the failed clinical trial were presented, AGI-1067 did not show any improvement in patients on its primary endpoint. On one of the study's secondary endpoints, AGI-1067's effects in diabetics, the drug did show some possible efficacy for this subgroup of patients.

Based on this data (and probably the fact that AtheroGenics would have to shut down otherwise), the company is planning on running a phase 3 study testing the drug's effects in type 2 diabetics. The study will be a six-month trial with an interim analysis occurring in the middle of 2008.

It's important to remember that just by statistical chance, a clinical trial involving even bubble gum could show some efficacy to different subgroups of patients. Without knowing more of the data from the patient subgroups in the earlier study (for instance, if the diabetic patient groups were balanced in terms of patient characteristics), investors are completely relying on AtheroGenics' selective presentation of the drug's effects on diabetics. After the way that the company made a mess of the AGI-1067 phase 2 atherosclerosis studies, I'm not prepared to give AtheroGenics the benefit of the doubt on the drug's potential to treat type 2 diabetics.

While there is some slight evidence that AGI-1067's predecessor, Probucol, may have an effect in diabetics, the evidence is so scarce that it seems like AtheroGenics is grasping at straws to justify continued development of the drug.

Rushing AGI-1067 into a phase 3 study on weak data is exactly the mistake (and misuse of shareholder cash) that AtheroGenics made with its failed cardiovascular phase 3 study earlier in the year. Without more data on the compound's effects on diabetics, investing in AtheroGenics based on the possible outcome of this diabetes study is barely more than gambling.

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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.