This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Keryx: Readers React to Perifosine Prediction

We made no effort to include or exclude companies to make the rule work any better. What we observed is undeniable: Micro-cap companies had no success at all with phase III cancer drug clinical trials.

The next logical step is to test this rule prospectively, which is why we've focused on Keryx and perifosine. Keryx fits the pattern of a micro-cap cancer drug stock with phase III trial results coming in approximately four months time. Based on historical precedent, that spells failure for perifosine. We'll learn if the rule holds true once Keryx makes public the results.

@stefbeck34 asks, "What was the success rate of the second strata? Wouldn't Aeterna and Keryx be greater than a $300 million market cap currently?"

There were 21 companies on the list with market values of $300 million or less, with a 0% success rate in phase III cancer drug clinical trials.

The list also contained 11 companies with market caps between $300 million and $1 billion. The clinical trial success rate for this mid-tier or second strata group was 18%. (Two positive clinical trials out of 11.)

Lastly, there were 21 of 27 studies reported by the larger companies analyzed (greater than $1 billion capitalization) that were positive, or a 78% success rate.

Combining Aeterna and Keryx (because they co-own perifosine rights) gets a market value of $350 million. That's large enough to push perifosine into the second strata of our analysis, but even here, the odds for a favorable outcome are very low.

Via Twitter, my friend and fellow biotech scriber Matt Herper from Forbes chimed in: "The implication of @adamfeuerstein's study is that the odds are even longer than you think."

Agreed. We all know that cancer drug development is hard, and harder still for smaller companies. In that regard, what Ratain and I are saying is not new. What is new, however, is that we've illustrated numerically just how challenging it can be for micro-cap cancer drug companies to succeed.

@claudeclement asks, "Why not put that article out a couple months ago when KERX's market cap was above $300M and saying it will succeed?"
6 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AEZS $0.18 -1.60%
KERX $7.39 -1.50%
AAPL $115.44 -2.50%
FB $94.26 0.13%
GOOG $631.32 0.02%

Markets

Chart of I:DJI
DOW 17,558.41 -39.79 -0.23%
S&P 500 2,093.20 -4.84 -0.23%
NASDAQ 5,107.5280 -7.8540 -0.15%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs