Sometimes drugs work, and sometimes they don't. That's just the nature of drug development. For drugs treating amyotrophic lateral sclerosis (ALS), still known as Lou Gehrig's disease, it seems that the latter category is more often the case.

The latest drug to fail against the fatal disease was Teva Pharmaceuticals' (Nasdaq: TEVA) Copaxone. Yesterday's announcement was light on the details, stating only that Copaxone failed to slow the progression of the disease or help ALS patients live longer. Investors probably don't need to know any more information than that, although I'm sure the data will be presented at a medical conference or in a journal later in the year.

It would have been ironic if a drug whose mechanism of action isn't fully understood had worked on a disease whose cause is equally mysterious. Teva's move to test the drug on ALS patients wasn't a complete stab in the dark; there's some evidence that the immune system plays a role in the development of ALS, and Copaxone mitigates the body's immune response.

Fortunately for Teva, this was only a small phase 2 trial, so it didn't have to shell out a lot of money to discover the drug's ineffectiveness for ALS patients. And it's still selling Copaxone for multiple sclerosis, which saw 21% year-over-year increase in sales last year even in the face of tough competition from Elan's (NYSE: ELN) and Biogen Idec's (Nasdaq: BIIB) Tysabri.

Unfortunately for ALS patients, there are few options for treating the disease. Sanofi-Aventis' (NYSE: SNY) Rilutek extends survival slightly, but the market is pretty wide open for a new drug to be developed. Teva has another compound, Talampanel, in phase 2 testing on ALS patients. CytRx's (Nasdaq: CYTR) arimoclomol is also in phase 2b testing, although the FDA currently has it on a clinical hold because of pre-clinical safety data.

The key to investing in biotech companies is to understand the risks involved and adjust your valuations accordingly. Given the track record of drugs attempting approval for treating ALS patients, I wouldn't give a positive value to any ALS drug in a pipeline until it had at least passed phase 2 trials. Even then, investors should proceed with caution until phase 3 results are announced.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Biogen is a pick of the Stock Advisor newsletter. The Fool has a disclosure policy.