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Keryx: Readers React to Perifosine Prediction

Stocks in this article: KERX AEZS

Ratain cites the following specific criticisms of the perifosine phase II study:

1) The p values are not real p values in the phase II study, as there were eight drugs being studied, multiple diseases, and an unknown number of looks at the data. He recommends people read "Fooled by Randomness."

2) Thus the first 25 patients (of the 38 reported) can only be considered hypothesis generating, since the observed nominal p value could be ascribed to data dredging.

3) The additional 13 patients are inadequate to assess the hypothesis of interest, particularly since we don't know the baseline characteristics of the additional 13 patients, including their refractory status to previous treatments. Therefore, the phase II results are un-interpretable.

4) In the absence of interpretable phase II data, the phase III will probably be negative, given what is known (publicly) about the drug's pharmacology.

5) Given the likelihood that deep pockets have looked at and rejected an acquisition or partnership based on nonpublic data (after signing a non-disclosure agreement), there is no reason to predict that the phase III will be positive.

Understand? If not, try this simplified interpretation: The phase II study of perifosine is too small and was changed and analyzed too often to have confidence in the published results. The clinical benefit, including survival, favoring perifosine that was observed in the phase II study stands a good chance of returning a false positive result that will not be confirmed in the larger and prospectively designed phase III study.

Ralph comments: "It is idiotic to believe you. You are basing your decision on two things. 1) Keryx is a small company; 2) No one has stepped up to buy Keryx. Maybe Keryx is waiting until the positive results are published. You know about as much as I do on this subject."

The "Feuerstein-Ratain rule" states the outcome of phase III cancer drug studies can be predicted accurately by looking at the market value of the company running the study. We believe investors, potential partners or acquirers (i.e. the market) does a good job of vetting cancer drug stocks by examining prior published or presented clinical data. Companies developing cancer drugs with a high likelihood of success are awarded large market valuations or acquired before phase III results are announced. Conversely, companies with cancer drugs not likely to succeed are punished with small market valuations or remain independent.

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