Wedbush analyst David Nierengarten came to the defense of GTx on Thursday following my story Wednesday explaining why the almost-completed phase III studies of the company's muscle-wasting drug enobosarm are likely to fail.
Nierengarten disagrees with my analysis and is telling clients to buy GTx because he believes the enobosarm phase III studies will succeed. I didn't find any of his rebuttals of the GTx bear thesis to be very persuasive, but one point he made does call out for a follow-up discussion.
In his GTx research note, Nierengarten says:"The opinion piece [that's mine] emphasizes mean and median measures of the Phase II study, claiming the populations overlap and therefore there is no treatment effect, and this will be demonstrated in the Phase III. This comment ignores the design of the Phase III studies, which use a responder analysis." [Emphasis his.] Ah, the responder analysis, otherwise known as one of the tricks companies use to rig the analysis of a clinical trial to produce the appearance of positive results (especially when real positive results are nonexistent.) Thanks to Nierengarten, we now know the GTx game plan for how results from the enobosarm phase III trial results will be announced. You should wary of any responder analysis. I'll explain, but first a recap of GTx's phase III trial. The design of GTX's two phase III cancer cachexia studies is fairly simple. Patients undergoing first-line chemotherapy treatment for non-small cell lung cancer with an accompanying diagnosis of cachexia are randomized to receive a daily, 3 mg dose of enobosarm or a placebo. After three months, the patients are assessed on two co-primary endpoints: 1) change in lean body mass (measured using an x-ray scan); and 2) physical function, defined as a 10% or greater improvement in the stair climb power test. Enobosarm has to meet both co-primary endpoints with statistical significance for the studies to be successful. Here's how the responder analysis kicks in. Each patient in the trial is assessed by the two co-primary endpoints. If both criteria are met -- no loss of lean body mass and a 10% or greater improvement in stair climb power -- the patient is considered a responder.
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