Biotech Mailbag: Transdel Pharma

BOSTON (TheStreet) -- Welcome back to the Biotech Stock Mailbag, where I note the Karmic retribution inherent in this week's news that former Biopure executive Howard Richman is going to jail for three years.

The first email is from Greg G.,who writes, "I wondered if you saw the press release put out by Transdel Pharmaceuticals(TDLP.OB Quote). I've seen many press releases trying to spin a negative trial result before, but this one takes the cake and I thought you'd get a kick out of it."

Classic bamboozlement! That was my first thought after reading Transdel's Oct. 6 announcement of "positive" phase III test results for it topical pain drug Ketotransdel.

Positive results? Sure, if and only if you exclude 30% of the patients who participated in the trial.

This is the old "per protocol" trick. Transdel says Ketotransdel demonstrated statistically significant pain relief in patients who complied with the study requirements. This "per protocol" patient population totaled 252 patients out of the 364 patients who enrolled in the study.

But as Transdel later admits in its press release:

"Analysis of the Intent-to-Treat (ITT) population of the primary efficacy endpoint (which includes all study patients even if they failed to comply with the protocol and study requirements) favored Ketotransdel compared to placebo but not to a degree that reached statistical significance." (Emphasis added.)

In other words, the Ketotransdel study failed. The FDA isn't going to allow Transdel to simply disregard the results from 30% of the study patients simply because the company claims they didn't follow the study's rules.