Biotech Stock Mailbag: FDA Playbook

BOSTON (TheStreet) -- The Biotech Stock Mailbag is thinking about roast turkey and all the fixings, but first, let's answer some email.

David B. writes, "I have a general question about FDA clinical trials. On Tuesday both Cerus(CERS Quote) and Discovery Labs(DSCO Quote) released news about proposed clinical trials. Cerus received feedback from the FDA that its proposed trial apparently did not have sufficient statistical power, and needs to go back and rework the design with more participants. Discovery submitted a trial design and expects feedback in the first quarter of 2010. Do all companies have to reach an agreement with the FDA on a design before initiating a trial? Or does the FDA just have to agree the trial design is safe, and unlikely to lead to harm? If the company and the FDA agree on a design, is that the same as what I believe is called a Special Protocol Assessment (SPA)? If companies and the FDA don't have to agree on a design, why would a company ever start a trial without buy in from the FDA on the design, that is, an SPA? If the outcome of the trial is favorable, doesn't having an SPA in place make FDA approval more likely?"

> > Bull or Bear? Vote in Our Poll

These are super-excellent questions. Smart drug and biotech companies keep the FDA abreast of their clinical trial program throughout the long drug development process. Typically, a company will have what is known as an "end of phase II" meeting with the FDA, where data from the completed phase II studies are reviewed and design ideas for phase III studies are discussed.

The FDA does not "approve" phase III studies. In other words, drug companies are free to conduct whatever phase III study is desired, as long as the FDA deems the drug being tested safe enough for human testing.

Call it bull if you ever hear a company executive say that the FDA encouraged or "blessed" a phase III study -- the suggestion being that the phase II data were so strong that the FDA has some interest in moving the drug toward approval. [Cel-Sci(CVM Quote) CEO Geert Kersten is guilty of this form of bamboozlement with his company's head-and-neck-cancer drug Multikine.]

The FDA doesn't bless clinical trials, at least not officially. The FDA is an impartial evaluator of clinical data; the agency is not a cheerleader or facilitator for drug sponsors.

Given that the FDA is the ultimate arbiter of a drug's risks and benefits, it's wise, naturally, for a company to heed the agency's advice when it comes to designing phase III studies. If the FDA recommends a certain primary endpoint or study design; if the FDA says it would like to see a drug studied in a certain patient population or tested against a specific control, then it would be extremely unwise to discard or ignore this advice.