Editor's note: Adam Feuerstein's columns run exclusively on RealMoney.com ; this is a special free look at his column. For a free trial subscription to RealMoney.com, please
click here . Back in July, after polling a group of trusted health care fund managers, I called Genta ( GNTA) one of the riskiest stocks in the biotech sector. Why? Because of the widely held belief that the trials of its experimental antisense cancer drug Genasense would fail, but Genta would nonetheless find something positive to say. That may throttle short-sellers, who now control 28% of the company's freely traded shares. It seems like that prediction has come true. Genta said Wednesday that Genasense failed to significantly extend overall survival in patients with advanced skin cancer, according to results from a large, phase III clinical trial. But despite the negative results shown in the study's primary endpoint, Genta is claiming victory and says it is filing the drug for approval with the Food and Drug Administration. The question left unanswered is what happens to Genta's stock today. Will investors believe the company's spin? Or will they look at the Genasense data and note that the melanoma study's primary endpoint -- the most important, clinically relevant goal of the study -- came up way short? Genta has always been a battleground stock between longs and shorts. Wednesday's announcement is only going to intensify the fighting, which I reckon will go on for a long time.
This isn't even close to being statistically significant: The study's "p value" came in at 0.184. In layman's terms, that means there was a greater than 18% chance that the results in the study occurred randomly. The accepted threshold for a random occurrence outcome in clinical trials is less than or equal to 5%. Here's some perspective. The much-heralded colon cancer study involving Genentech's ( DNA) Avastin this past spring came in with a p value of .00003 for its primary endpoint. (That means there was a microscopically small .003% chance that the results were random.)
Yet nowhere in today's press release does Genta acknowledge that the melanoma study's primary endpoint failed. Instead, the company says that a variety of secondary endpoints (read: less clinically important) did achieve statistical significance, including progression-free survival and tumor response rate. This is the basis upon which Genta says Genasense is an effective, clinically meaningful treatment for melanoma?