It's a reasonable argument to make, except, "If the earlier perifosine data are so good, why hasn't Keryx been bought out yet," asks Ratain.

Good question!

When Ratain and I were working on our JNCI paper, we recognized that one reason micro-cap cancer drug stocks had a perfectly dismal record with phase III trials is because the drugs being developed had already been vetted by both the market (i.e., investors) and larger, more successful cancer drug companies and found to have a low probability of success.

Cancer drugs are scarce and valuable commodities. Larger drug companies are way more likely to acquire, or at least partner with, a smaller drug company if that smaller company has a cancer drug in development with a strong shot at being successful.

Keryx has already stated publicly that it hopes to attract a buyer for the company. Yet, as Keryx nears the end of its colon cancer phase III study, the company is still independent -- no perifosine buyer, no partner either. Aeterna Zentaris ( AEZS), which owns ex-U.S. rights to the drug, doesn't count.

What's more likely to have happened already, says Ratain (and I agree with him) is that larger companies have already vetted the previous perifosine data and found it lacking. That makes Keryx look very much like the 21 micro-cap cancer drug companies included in the analysis done by Ratain and myself for JNCI. And that's not the group you want to be associated with.

Keryx and perifosine is an ideal, prospective test of whether stock market value can predict cancer drug trial outcomes. I'm looking forward to early next year when Keryx announces the perifosine results.

Some quick hits:

I mentioned on Twitter last week that Rodman & Renshaw was inviting investors to a "non-deal" road show for Cell Therapeutics ( CTIC) in New York City on Oct. 19.

To which Zacks analyst Jason Napodano (@JNapodano) replied, "There's no such thing as a "non-deal" show with R&R."

So true. Expect Cell Therapeutics to raise money again real soon.

Alan P. asks me to predict the outcome of the shareholder vote on the proposed merger between Amag Pharmaceuticals ( AMAG) and Allos Therapeutics ( ALTH). The vote is scheduled for Oct. 21.

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Today's Perilous Reversal Stock: Keryx Biopharmaceuticals (KERX)