For drug company investors, there's one final step between the phase 3 trial results and a Food and Drug Administration decision: the dreaded advisory committee meeting.

The committees are made up of a panel of outside experts with experience in the particular field. The Arthritis Advisory Committee, for instance, covers autoimmune disease, so it'll likely get a crack at Human Genome Sciences (Nasdaq: HGSI) and GlaxoSmithKline's (NYSE: GSK) recently submitted lupus drug Benlysta.

Concept Capital's Washington Research Group recently looked back at the results from all the advisory committee meetings over the last three years and noted some interesting trends.

Overall 70% of the drugs were given a thumbs-up by their respective committees, but the range was pretty wide. At the low end, the Oncologic Drugs Advisory Committee recommended approval of just 55% of the drugs that came before the committee, while the Peripheral and Central Nervous System Drugs Advisory Committee recommended all seven of the drugs that came before it -- the most recent of which was a 25-to-0 ringing endorsement of Novartis' (NYSE: NVS) Gilenia.

The simple conclusion here is that if you invest in multiple sclerosis drugs and avoid cancer drugs, everything will be O.K.

Sorry. It doesn't work like that.

Advisory committees advise -- the FDA decides
Getting past the FDA advisory committee isn't a guarantee that the drug is going to get approved. Dendreon's (Nasdaq: DNDN) Provenge, InterMune's (Nasdaq: ITMN) pirfenidone, Schering-Plough's (owned by Merck (NYSE: MRK)) Bridion, and Bristol-Myers Squibb's (NYSE: BMY) belatacept were all given the thumbs up by an FDA advisory committee only to get sent back to the drawing board by the FDA.

In other words, if the committee pans the drug the chance of an approval is virtually nonexistent, but a positive recommendation isn't a guarantee of a positive FDA decision. The FDA's opinion of the drugs and the questions the agency asks of the outside experts are often more telling about how the FDA will side than how the actual committee vote comes down.

But there's a bigger point here
I'm not convinced that the oncology committee is necessarily tougher than the nervous system committee. A perfectly reasonable explanation of the historical data is that the committees are equally tough, but companies developing cancer drugs are more likely to try and get junk approved.

For instance, Cell Therapeutics submitted an application for its lymphoma drug pixantrone using data that one committee member characterized as coming from a study that wasn't "well designed or well executed." Ouch.

From the company's perspective, rolling the dice and submitting less-than-stellar data isn't a horrible move. It's already sunk millions of dollars into the clinical trials; submitting a marketing application to the FDA doesn't cost that much more. And given the terminal nature of cancer, you can imagine doctors on the panel might be a little more forgiving than for, let's say, another cholesterol drug.

For investors, these types of situations can mean long shots that turn into quick multi-baggers. Hitting the lottery when the FDA advisory committee gives a company a pass on inferior data may sound like fun, but resist the temptation to invest anything other than money that would otherwise be destined toward Vegas. That's nothing more than a crap shoot. And at least in craps you know the odds and expected return going into the roll.

One more piece of the puzzle
Investing in the drug space isn't easy; it takes a bit more studying to understand the chance at approval. Fortunately drug company investors get more information about potential new products than probably any other industry.

When making a decision about whether to invest in a company, don't get hung up on the advisory committee meeting. It's just one more piece of data to help you decide if the company is multi-bagger worthy.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Novartis is a Motley Fool Global Gains pick. The Fool owns shares of GlaxoSmithKline and has a disclosure policy.