ROCKVILLE, Md. ( TheStreet) -- I'm going to dissect the results from Rexahn Pharmaceuticals' ( RNN) phase II study of its experimental anti-depressant Serdaxin that were announced last week. Rexahn declared the Serdaxin study positive, but the market said otherwise. Rexahn lost about 50% of its value Tuesday, falling to $1.76 a share, following the release of the Serdaxin data on Tuesday afternoon. But the stock recovered a bit after the company tried to further explain the study results Wednesday. By Friday, the stock closed at $2.84 a share. I'm often asked how I go about evaluating clinical data. Here's how I do it. Since all we have is Rexahn's press release describing the Serdaxin phase II study in depression, that's what I'll use to parse the data: Rexahn's press release begins: "The randomized, double blind, placebo controlled and dose ranging clinical trial enrolled 77 patients at multiple sites in the United States. The results of the subgroup analysis are compelling and warrant further study in a larger phase 2 trial." A good start. Rexahn designed the phase II study with a placebo control arm, to which we can compare and evaluate Serdaxin's efficacy and safety. The study is dose ranging, too, so we can see whether escalating doses of Serdaxin improve efficacy and/or cause added side effects. "The results of a subgroup analysis..." The first warning bell goes off and we've barely gotten started. When a company highlights a positive subgroup analysis, it often means the overall study was negative, forcing the company to go on a fishing expedition through the data to find a group of patients with positive results. Let's see what Rexahn says next about the Serdaxin data. "In the subgroup analysis, the study showed that patients with severe MDD taking 5 mg of Serdaxin had significant improvement in Montgomery-Asberg Depression Rating Scale (MADRS) scores after 8 weeks of treatment, compared to placebo. Among the 77 patients, 53 patients were classified as having severe MDD. Of the 14 patients treated with 5 mg of Serdaxin MADRS scores improved by 55.6%, compared to only 34.0% in the placebo group (n=14), which was statistically significant (p less than 0.041) on an intent to treat basis." Alright, here's the positive data referenced in the first paragraph. The subgroup is patients with severe depression. Treatment with 5 mg of Serdaxin resulted in an almost 56% improvement in MADRS scores compared to a 34% improvement for patients treated with placebo. The result was statistically significant, although just barely, with a p value of less than 0.041. The MADRS scale is a rigorous and commonly used efficacy measure in depression studies, so no quibbles there. But Rexahn's disclosure of the "positive" data in this paragraph comes with some gaping discrepancies. Let's start with the identified subgroup of patients with severe depression, which accounts for 69% (53 of 77) of the patients enrolled. Was this a prospectively defined subgroup of patients? Rexahn doesn't say, but I have my doubts.