Dimebon Dimebolin Information Availability » Experimental Drug

Gaining on Prostate Cancer

admin — Mon, 06 Feb 2012 06:17:29 +0000

Drug Firms Advance Rapidly After Long Drought, but Treatments Are Pricey

Drug companies have scored a string of recent successes against advanced prostate cancer, ending a long drought during which there seemed to be few weapons to combat the disease.

In the latest evidence of progress, researchers reported Tuesday that an experimental drug from San Francisco-based Medivation Inc. extended survival by nearly five months in a 1,199-patient study. A second drug, a radiation-emitter being developed by Bayer AG and Algeta ASA of Norway, targeting prostate cancer that has spread to the bone, improved survival by nearly three months in a 922-patient study.

Results of both trials were released ahead of their presentation at the American Society of Clinical Oncology’s Genitourinary Cancers Symposium being held this week in San Francisco.

If the drugs win approval soon from the Food and Drug Administration, it would mean that after decades of frustration, the pharmaceutical industry will have turned out five new treatments for advanced prostate cancer within just three years.

Those already approved within the past two years include Dendreon Inc.’s Provenge, Jevtana from Sanofi SA, and Zytiga from Johnson & Johnson.

The pharmaceutical industry is increasingly looking for ways to speed development of new drugs—including the realization that closer ties to academic researchers can aid in discovery. Medivation’s compound, called MDV3100, is notable for how it was developed—largely in the research laboratory of Charles Sawyers, a scientist at Memorial Sloan-Kettering Cancer Center with a track record in drug discovery.

Medivation expects to file its application with the FDA this year. Assuming all goes well, the drug could be on a track to win approval about five years after it was first tested in people. “By any standard, that would be considered very, very quick,” said David Hung, Medivation’s chief executive officer.

Also helping progress is a growing understanding of the biology of prostate cancer, a disease fueled largely by the male hormone testosterone.

The new treatments aren’t cures and individually their impact on survival is modest—in clinical trials each added a median of roughly three to five months to patients’ lives. Their high cost is likely to complicate adoption for many patients. Provenge, for instance, costs $93,000 for a course of three treatments while Zytiga’s price is about $5,000 for a monthly supply of pills.

But some researchers believe that the options will lead to new strategies where the drugs are used either sequentially or in combination to significantly extend survival. The new treatments are expected to cause the world-wide market for prostate cancer therapies to surge to $4 billion by 2015, according to Morningstar Inc., up from about $1 billion currently.

“The whole equation for prostate cancer is completely different,” said Christopher J. Logothetis, chief of genitourinary medical oncology at M.D. Anderson Cancer Center, Houston. “It is [now] among the solid tumors that should be considered highly treatable.”

All of this stands in contrast to just a decade or so ago when the disease was considered resistent to almost any treatment. Drug companies would say “nothing has worked in 35 years. Why are we going to throw our [new] drug at that?” said Bruce Roth, professor of medicine and an oncologist at Washington University, St. Louis. “Now we’re starting to see a payoff in the investment in research about the biology of prostate cancer.”

MDV3100 is a case in point. Dr. Sawyers, a Howard Hughes Medical Institute investigator, played important roles in the development of Novartis AG’s breakthrough leukemia drug Gleevec and a second-generation version called Sprycel from Bristol-Myers Squibb Co.

In the mid-1990s, while at University of California at Los Angeles, Dr. Sawyers became interested in why men with prostate cancer relapsed on hormone therapy—the standard treatments, which starve prostate tumors of testosterone, the primary fuel that makes them grow.

Conventional wisdom was that once a patient relapsed, the so-called androgen receptors—structures that protrude from tumor cells like a lock to attract the testosterone “key” that activates them and promotes tumor growth—were no longer driving the disease. Dr. Sawyers was skeptical. In a series of experiments with mice, he and his colleagues found that drug-resistant patients actually had elevated (not lower) levels of androgen receptors. Drugs were now activating them instead of blocking out the testosterone.

“It wasn’t destroying dogma, but it wasn’t what people expected,” Dr. Sawyers said. “It put a spotlight on the androgen receptor as a drug target.”

But he said he wasn’t able to persuade any drug companies to pursue the lead. So he teamed up with a chemist, Michael Jung, at UCLA to design a drug themselves.

Scouring patent databases, Dr. Jung discovered a compound made by the former French drug maker Roussel Uclaf that locked onto the androgen receptor about 100 times more strongly than the commonly used prostate-cancer drug, Casodex.

Using that drug as a template, and taking on a task normally performed by drug-industry scientists, Dr. Jung fashioned some 200 slightly different molecules, which the researchers tested against tumor samples in their own version of the drug industry’s high-volume screening technology. They came up with a promising candidate, tweaked it so it would be absorbed in the blood as a pill and then performed the key experiment—testing it in mice to see if it would shrink tumors.

“It did, very dramatically,” Dr. Sawyers said. But academic scientists aren’t positioned to take the drug across the “valley of death”—the chasm between a promising compound discovered in the lab and the work required to test it in humans, said Dr. Sawyers, who as an inventor of MDV3100 is entitled to royalties on any sales.

In 2005, Medivation agreed to license the drug. The company confirmed the researchers’ findings, tested the molecule and altered its formulation to make it suitable for humans, and filed an application with the FDA to start human studies.

Howard Scher, a veteran of prostate-cancer studies and chief of the genitourinary oncology service at Memorial Sloan-Kettering Cancer, agreed to run the research, which began in 2007. Aided by a 13-center research consortium group funded by the Defense Department and the Prostate Cancer Foundation and intended to speed development of medicines for the disease, researchers ultimately and rapidly enrolled 140 patients, with promising results.

In 2009, Medivation, in collaboration with Astellas Pharmaceuticals Inc. of Japan, launched a late-stage trial, the results of which Dr. Scher reported Tuesday.

Dr. Scher reported that the 800 patients treated with the drug had a median survival of 18.4 months compared with 13.6 months for those given a placebo. In addition, 54% of MDV3100 patients—compared to 1.5% of those on placebo—had a greater than 50% reduction in a marker called prostate specific antigen—an indicator of a positive response to the drug. Side effects included fatigue.

During a news conference to announce the findings, Nicholas J. Vogelzang, chairman and medical director of the developmental therapeutics committee of US Oncology, a cancer treatment company, called the results “unprecedented.” He added: “This is definitely going to change the way we take care of patients every day in the office.”

Dr. Scher said the first patient he treated four and a half years ago is still alive and on the drug. “That’s the beauty of a targeted agent,” he said.

For Medivation, the successful study contrasts with news two weeks ago that, along with partner Pfizer Inc., it was pulling the plug on development of an Alzheimer’s drug called dimebon after it failed to show benefit in a late stage, 1003-patient study.

http://online.wsj.com/article/SB10001424052970203920204577195372964538152.html

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Alzheimer’s drug fails for Pfizer, Medivation

admin — Sun, 29 Jan 2012 08:32:11 +0000

Pfizer and Medivation ended their collaboration on the experimental drug Dimebon for Alzheimer’s disease after the medicine failed in another late-stage clinical trial.

Dimebon was one of two drugs Pfizer had in its late-stage pipeline to treat the neurodegenerative disease. The other is bapineuzumab, which Pfizer is developing with Johnson & Johnson. The treatments have different mechanisms of action.

Dimebon didn’t show statistically significant results in a study that evaluated the compound when added to a standard treatment in patients with mild to moderate forms of the disease, the companies said Tuesday. The companies will end development of the drug for all uses, and will stop a current study.

San Francisco’s Medivation dropped 3.3 percent to $53.90 at the close in New York. Pfizer, the world’s biggest drugmaker, gained less than 1 percent to $21.94.

Dimebon also failed in a late-stage trial in 2010, sending Medivation shares down 67 percent in one day.

The federal Centers for Disease Control and Prevention in Atlanta estimates that at least 5 million Americans have Alzheimer’s. The disease usually begins affecting people around age 60. There is no known cure.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/01/17/BUD01MQG0I.DTL

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Pfizer, Medivation end development of potential Alzheimer’s treatment Dimebon

admin — Sat, 21 Jan 2012 12:26:49 +0000

TRENTON, N.J. — In a major setback for patients and doctors, drugmakers Pfizer Inc. and Medivation Inc. have halted development of a potential Alzheimer’s disease treatment after the drug for a second time yielded disappointing results in a late-stage clinical study.Dimebon was furthest along in testing among the experimental Alzheimer’s drugs being developed to try to stop or even reverse the course of the mind-robbing disease. Dimebon would have been the first such drug and specialists just a couple of years ago had hoped it would be on the market this year.

Pfizer, the world’s largest drugmaker by revenue, and Medivation said on Tuesday that Dimebon failed to significantly improve cognitive ability, as well as self-care and daily functions in patients with mild-to-moderate cases of the disease. The study involved about 1,000 patients who had Dimebon added to their ongoing treatment with Pfizer’s former blockbuster Alzheimer’s drug donepezil, or Aricept.

Aricept, jointly marketed by Pfizer and Japan’s Esai Co. Ltd. and once heavily advertised, had about $3.7 billion in sales in 2009. It lost U.S. patent protection in November 2010, and sales have since plunged.

Dimebon, known chemically as latrepirdine, would have been an even bigger blockbuster if it had panned out. The experimental drug looked promising after it kept Alzheimer’s symptoms from worsening for a year in an earlier patient study.

But Dimebon didn’t work as hoped in a late-stage trial in which patients took it for six months. After those results, announced in March 2010, the companies said they were continuing three other studies that could prove Dimebon helped patients in combination with other Alzheimer’s drugs or when used for a longer period.

Then last April Pfizer and Medivation said Dimebon also failed in another late-stage clinical trial, when it did not improve symptoms of the neurologic disorder Huntington’s Disease.

After the latest failure, New York-based Pfizer and Medivation, headquartered in San Francisco, said they are ending development of Dimebon, as well as their agreement to market the potential treatment.

Pfizer still has one Alzheimer’s treatment in late-stage testing, bapineuzamab, which it is jointly developing with Johnson & Johnson. It’s a biologic drug, grown in living cells rather than made by mixing chemicals, and works differently than Dimebon.

Alzheimer’s disease is the most common form of dementia, and drugmakers are trying to find a treatment that does more than temporarily ease the symptoms: memory problems, confusion, aggression and a general decline in ability to function, which together can hasten death. Many drugs have flopped in late-stage testing in recent years, including some that seemed to clear harmful plaque from afflicted brains.

The newest drug for Alzheimer’s symptoms, Namenda, was approved back in 2003.

Cases of Alzheimer’s disease are expected to triple by 2050, to around 106 million people worldwide. The disease strikes nearly a half million new patients a year, mainly as people hit their 70s or 80s.

In trading Tuesday, Pfizer shares rose 9 cents to $21.93, while Medivation stock dropped $1.82, or 3.3 percent, to $53.90.

http://www.washingtonpost.com/business/industries/pfizer-medivation-end-development-of-potential-alzheimers-treatment-dimebon/2012/01/17/gIQA91uF5P_story.html

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Prostate Cancer Drug Shows Promise in Study

admin — Sat, 05 Nov 2011 00:00:13 +0000

Yet another experimental drug has shown it can extend the lives of men with advanced prostate cancer.

Medivation, a biotechnology company in San Francisco, announced Thursday morning that in a late-stage clinical trial, its drug, called MDV3100, had prolonged median survival by 4.8 months. Men who received the drug lived a median of 18.4 months compared to 13.6 months for men who received a placebo.

Because of those results, the committee monitoring the trial ended it early and all patients will be offered MDV3100. The company said it did not have information yet on the drug’s side effects.

Several new prostate cancer drugs have been approved in the last couple of years, after a long fallow period, and others are in advanced development. While most have shown they extend lives, they have raised concern about their costs.

It is not clear yet how much MDV3100 will cost. Medivation is not expected to file for approval until sometime next year. Astellas Pharma, a Japanese company, will help Medivation sell the drug in the United States and has marketing rights elsewhere.

Medivation’s drug, like many of the others, was tested in patients whose cancer had spread beyond the prostate gland and was worsening despite their having tried hormone-deprivation therapy and the chemotherapy drug docetaxel, also known as Taxotere.

MDV3100, taken orally once a day, works to block the effect of testosterone in fueling prostate cancer growth. But rather than stop production of testosterone, as some other drugs do, MDV3100 blocks the action of the hormone. The company calls this an androgen receptor signaling inhibitor.

The drug is likely to compete most directly with Johnson & Johnson’s Zytiga, which was approved in April. In a clinical trial, Zytiga improved median survival by 3.9 months, as initially reported, though the company later updated that figure to 4.6 months.

MDV3100 and Zytiga have not been compared head to head in a trial, so it is difficult to say one drug is better than the other. But investors were very enthusiastic about the prospects for MDV3100. In early trading Thursday, Medivation’s shares more than doubled to $35.30.

The market is getting crowded and not all prostate cancer drugs are doing well. Provenge, a novel drug that trains the patient’s own immune system to fight the cancer, has had far worse sales than its developer, Dendreon, expected. That is in part because of the $93,000 price for a course of treatment.

Dendreon reported third-quarter earnings after the close of markets on Wednesday. Sales are improving only slowly. The company’s shares were down 26 percent in trading on Thursday, to $6.70.

Until Thursday’s success with MDV3100, Medivation was known mostly for championing an old Russian antihistamine as a potential treatment for Alzheimer’s disease. Pfizer paid $225 million to license rights to that drug, called Dimebon. But Dimebon failed in a big clinical trial.

http://prescriptions.blogs.nytimes.com/2011/11/03/prostate-cancer-drug-shows-promise-in-study/

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Pfizer throwing money to buy 700 million experimental drug Dimebon-Pfizer, drug, Dimebon-pharmaceutical industries

admin — Thu, 20 Oct 2011 09:04:26 +0000

Recently, Pfizer agreed to pay San Francisco-based Medivation Inc. up to 725 million U.S. dollars of funds to be used to treat other developed experimental Alzheimer’s drug Dimebon. This is the world’s largest pharmaceutical companies in deals this year, the ninth operation. Under the agreement, Medivation will receive Pfizer USD 225 million down payment, as well as drug listing process, linked to up to 5 million milestone payment.

Hot Present, pharmaceutical companies are racing to develop for the treatment of Alzheimer’s disease drug. Analysts believe that 2012, the size of this market could grow to 20 billion U.S. dollars. Although Pfizer has been on sale for Alzheimer’s disease therapy Aricept, but in 2010, the drug will face competition from generic drug companies, while the other is developing Alzheimer’s Treatment drugs have not yet entered the final testing stage. Therefore, the transaction may help Pfizer in the treatment of Alzheimer’s disease to achieve a quantum leap in the field, and with the development of such drugs, Lilly, Wyeth and Elan Corporation to compete.

Pfizer has the world’s best-selling drug Lipitor last year, this reduction Cholesterol Drug sales 12.7 billion. However, Lipitor will lose patent protection in 2011 and faces generic competition this end, the hands hold 29,000,000,000 US dollars cash, Pfizer is searching for new drugs to cover sales of Lipitor left empty .

Analyst at Miller Tabak in New York LesFuntleyder that, although Alzheimer’s disease is a difficult to treat disease, but Pfizer, this deal appears to be a positive risk-return opportunities, if Pfizer wants to make up for the next few years will experience significant economic losses, it needs to continue aggressive.

Two companies will share development and marketing in the United States, of which 60% of the cost of Pfizer’s commitment to share in the United States to achieve 60% profit. Pfizer will be responsible for sales outside the United States Dimebon, Medivation Inc. to pay the sales commission. In order to be allowed in the U.S. market, Medivation and Pfizer Inc. are jointly carrying out the work of the last test in order to make good to the U.S. regulatory approval for preparation.

High hopes Medivation Inc. was founded in 2003, currently has 40 employees. In the second quarter, Medivation losses amounted to 18.5 million U.S. dollars, compared with last year’s 7.2 million U.S. dollars increased substantially. Medivation’s Dimebon is the main product. 80s of last century, it first as an antihistamine in Russia. To the 90?s, the Russian chemist SergeyBachurin in a variety of laboratory animal tests showed that the drug has the potential to improve the animal’s cognitive abilities. But in the United States, almost no attention to these findings, until the bio-technology entrepreneurs DavidHung discovered in 2003, these studies, the situation began to change. DavidHung visit to Russia in the field heard the results, he decided to set Medivation Inc., began commercial operation of the drug.

Pennsylvania RaymondMyers Emerging Growth Equities analyst, said Pfizer is a great Cooperation Partners, it has tremendous marketing tentacles, especially in the areas of primary health care; Pfizer With Aricept Alzheimer’s disease treatment in a leading position in the field.

According to the British medical journal “Lancet” published in July a study, Dimebon may help Alzheimer’s patients remember the date, understand medication instructions, follow commands, memorize some words and perform simple activities.

http://focusincholesterol.com/pfizer-throwing-money-to-buy-700-million-experimental-drug-dimebon-pfizer-drug-dimebon-pharmaceutical-industries

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Dimebon fails in late-stage human HD clinical trial

admin — Fri, 19 Aug 2011 13:34:45 +0000

Dimebon fails to improve symptoms in HD patients in the HORIZON trial

Dimebon, an experimental drug marketed by Medivation, fails to improve the symptoms of Huntington’s disease patients in the HORIZON trial. This is the end of the road for developing this drug for HD.

What is Dimebon?

Dimebon is an old drug, actually developed as an allergy medicine in Russia. Based on improvements in the mental or ‘cognitive’ symptoms in some Alzheimer’s disease patients taking the drug, it was developed by Medivation and Pfizer as a potential treatment for both Alzheimer’s and Huntington’s disease.

What’s been done before?

In the early phases of drug development, clinical trials are aimed at showing that the drug is not harmful, in small numbers of healthy volunteers or patients. The earlier DIMOND trial looked at the effect of Dimebon on 90 HD patients taking either Dimebon or a placebo. That trial showed that Dimebon was safe, and suggested there might be some benefit in the mental problems associated with HD.

A larger “phase III” trial was therefore conceived. Called HORIZON, this trial involved several hundred HD patients in Europe and the USA, with the goal of definitively proving that Dimebon helped with the cognitive symptoms of HD.

Phase III trials are the final stage before a drug company applies to the regulatory agencies for approval for a drug. Success or failure at the phase III level is what ultimately controls what drugs are available to patients.

Worryingly, in the meantime, Dimebon had failed to improve symptoms in a large phase III study of hundreds of Alzheimer’s disease patients. The failure of that larger trial raised concerns about the drug. Nevertheless, because of the positive results from the DIMOND trial, the HORIZON trial in HD patients continued.

What are the results?

The HORIZON trial focused on two measures — a short mental quiz called the ‘mini-mental state examination’ and another score (called the ‘CIBIC-plus’), which is based on a physician’s impression of a patient’s symptoms.

Both of these measures failed to improve in the patients taking Dimebon, compared to those taking placebo. The numbers were not close — it was a clear failure on both measures.

Now what?

According to a press release issued by Medivation, David Hung (president and CEO) has said “we will discontinue development of Dimebon in Huntington disease, including the ongoing open-label extension study” — the end of the road for Dimebon in Huntington’s Disease.

Silver linings?

There’s usually an up-side to bad news in science. One way to look at this disappointing announcement is that the results were very clearly negative, with no room for doubt. That means it’s now clear that studying Dimebon further in Huntington’s disease isn’t worthwhile — so patients and researchers can spend precious time and resources developing other treatments — and, as our other HDBuzz articles will hopefully demonstrate, there are plenty of those in the pipeline.

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Pfizer throwing money to buy 700 million experimental drug Dimebon-Pfizer, drug, Dimebon-pharmaceutical industries

admin — Tue, 19 Jul 2011 13:32:33 +0000

http://focusincholesterol.com/pfizer-throwing-money-to-buy-700-million-experimental-drug-dimebon-pfizer-drug-dimebon-pharmaceutical-industries

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Pfizer, Medivation end development of Dimebon in Huntington disease after trial failure

admin — Tue, 12 Jul 2011 14:46:00 +0000

Pfizer and Medivation reported Monday that the experimental drug Dimebon (latrepirdine) failed to meet either of the main goals in a late-stage trial for patients with Huntington disease. Medivation CEO David Hung said that the companies would “discontinue development of Dimebon in Huntington disease, including the ongoing open-label extension study.”

The HORIZON trial randomised 403 patients with Huntington disease to receive Dimebon three-times daily or placebo for six months. Data suggested that no statistically significant improvements were observed between the two groups in a measure of cognition or clinician’s impression of improvement in global function.

Hung noted that the Phase III CONCERT trial investigating the agent in patients with mild-to-moderate Alzheimer’s disease would continue, with top-line data expected “in the first half of 2012.” The drug previously failed to show effectiveness in treating Alzheimer’s disease in the late-stage CONNECTION trial.

http://www.firstwordplus.com/Fws.do?articleid=B46580191B5548278A60D2204BF85ACB

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Pfizer, Medivation’s Dimebon Fails in Huntington’s Study

admin — Mon, 27 Jun 2011 13:04:38 +0000

Medivation Inc. (MDVN) and Pfizer Inc. (PFE) said their experimental drug Dimebon failed to ease Huntington’s disease symptoms and testing for the illness will end.

Study of the medicine as a treatment for Alzheimer’s disease will continue, the companies said in a statement. In Huntington’s, Dimebon didn’t work better than a placebo in lessening mental decline.

Dimebon, a 28-year-old hay fever treatment, failed in a trial for Alzheimer’s disease in March 2010. Caused by a genetic defect on chromosome 4, Huntington’s has no cure and there is no way to prevent the disease from worsening, according to the National Institutes of Medicine.

“Huntington’s is a challenging disease area, and we are also disappointed,” said Steve Romano, the head of Pfizer’s medicines development group, in the statement.

Huntington’s symptoms include antisocial behavior, hallucinations, irritability, paranoia, abnormal movements and dementia.

Medivation, based in San Francisco, rose 37 cents, or 1.8 percent, to $20.48 at 4 p.m. New York time in Nasdaq Stock Market composite trading. Pfizer, based in New York, rose 21 cents, or 1 percent, to $20.67 in New York Stock Exchange composite trading.

http://www.bloomberg.com/news/2011-04-11/pfizer-says-dimebon-did-not-meet-primary-efficacy-endpoints.html

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The Three Distinct Phases of Clinical Trials

admin — Mon, 25 Apr 2011 07:24:57 +0000

Before a new, experimental drug is tried in humans, it’s put to work in test tubes and then animals. Once it’s ready for human trials, it’s tested in three distinct phases.

The Phase I trial is conducted with a limited number of subjects, usually fewer than 50. In cancer trials, the drug will be given to patients, sometimes as a last resort. For drugs targeting many other diseases, they’re given to healthy volunteers so doctors can better understand how the drug reacts inside the human body.

If a drug is deemed safe after this period, the company will proceed to Phase II. This trial usually consists of a few dozen to several hundred patients receiving varying dosage levels of the particular drug.

The data that’s considered most accurate is from a trial that’s “double blind” (neither the patient nor the doctor know if the patient has received the drug) and placebo controlled (compared to a placebo or standard of care). Few Phase II trials are double blind and placebo controlled.

In Phase III, companies test hundreds to thousands of patients. If the data proves that the drug is safe and effective, the company will usually apply for approval.

Naturally, the more patients who take part in a trial, the greater the chance the drug fails. For example, the drug may not work, or there may be unexpected side effects. This is especially common in cancer trials, where the response rates are low, even with approved drugs.

Positive results in Phase III can push a stock higher as investors begin focusing on approval and the sales and profits that could follow. However, it doesn’t always work that way. The Food and Drug Administration (FDA) for one reason or another has rejected many drugs with seemingly strong Phase III results. This can crush investors who followed a drug stock all the way to the end.

For example, MannKind Corp. (Nasdaq: MNKD) has seen its stock rise and fall sharply several times. Investors got their hopes up on the company’s inhaled insulin product Afrezza, only to see the FDA reject it time and again over safety issues.

This is one reason why Phase II is the real sweet spot for biotech investing.

Phase II Trials: A Profitable Time to be Involved in Biotech Investing

Phase II is often the most profitable time to be involved in a small cap biotech stock. Many times, Phase II results are positive. Sometimes it’s because the drug works. And other times it’s because the trial is rigged to provide positive results.

For example, Cel-Sci Corp. (AMEX: CVM), a company that stirs passion (both positive and negative) among biotech investors, ran a Phase II study on the head and neck cancer drug Multikine. However, rather than test the drug against other existing treatments, Multikine was given along with an existing treatment.

At the end of the trial, Cel-Sci boasted of a 12% complete response rate. But it was impossible to determine if the patients who had a complete response saw their tumors disappear due to Multikine or due to the other treatment.

So, why would a company do that?

To show good results in the hopes of raising additional capital.

There also are times when the science is conducted properly and Phase II claims are valid, but the drug isn’t able to replicate results in a Phase III trial. Remember, a Phase II trial usually contains a much smaller sample size, which can easily distort results.

Very often, when a company reports strong Phase II results, the stock takes off, as it is the first real indication that it might be approvable. Investors get excited; potential partners begin sniffing around; and the media begins to cover the drug’s potential. Even though at this point things are just starting to get promising, it’s often a great time to take the money and run.

Phase III, on the other hand, is fraught with risk. These trials are expensive to run, and there’s no guarantee that the drug will again show strong results. For example, there have been some instances where the drug replicated its earlier results, but there was a stronger than expected response from the placebo group, narrowing the difference that the drug made and making it appear less effective.

Phase II Takes Off and Fails in Phase III

There are many instances in which stocks took off during or after Phase II results, but then experienced major losses when the drug failed in Phase III.

A few real world examples – my subscribers made money on Medivation Inc. (Nasdaq: MDVN) despite a disastrous Phase III trial that resulted in the stock plummeting.

Medivation had a drug for Alzheimer’s called Dimebon. The Phase II results were outstanding. They showed a slower deterioration and fewer side effects than the existing therapies, including Pfizer Inc.’s (NYSE: PFE) Aricept. Despite skeptics’ doubts, the stock ran in anticipation of Phase III results. If the data was strong and the drug got approved, it would likely be an immediate blockbuster.

After the stock doubled, I recommended that subscribers take half of their profits off of the table. So with investors now playing with the “house’s money,” we waited for the Phase III results.

It turns out, the drug didn’t work.

The stock got crushed, and we sold out our remaining position. But because we had sold half at a 100% profit, we still pocketed a 37% gain. That’s not bad for a failed drug.

If The Smart Money Leaves… Take Your Profits and Follow

There have been several other instances where something similar has occurred. We made a 102% gain on Delcath Systems Inc. (Nasdaq: DCTH) and a 42% gain on MELA Sciences Inc. (Nasdaq: MELA), despite FDA rejections.

Although in these cases the Phase III trials were not deemed a failure, the FDA has rejected the applications for approval until more questions are answered.

Lastly, after positive Phase II results, you sometimes see the early investors and the venture capitalists exit the position. They’ve made their money and don’t want to stick around for the risky Phase III. If the smart money is leaving, it may be a good idea to follow them out the door.

There’s nothing wrong with hanging around and seeing if a small biotech company can get the ball across the goal line and get its drug approved. But considering that less than half of all drugs in Phase II actually make it to the market, it’s a smart idea to take profits along the way when you can.

http://moneymorning.com/2011/04/20/biotech-investing-phase-ii-is-the-sweet-spot/

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