According to GTx, the phase III study will be a success if the number of responders in the enobosarm arm is greater than the responders in the placebo arm. The difference favoring enobosarm has to be statistically significant as well. The problem with a responder analysis is that it only tells you the benefit derived by individual responders, but says nothing about the clinical meaningfulness or magnitude of treatment effect for the patients as a whole. A per-patient responder analysis can be useful but only in the context of knowing if the entire group of patients treated with a drug benefits over a control. I'll use an extreme example to demonstrate my point. In a two-arm study, let's say 20% of patients treated with a drug respond but the other 80% either don't respond or are made worse off. In the placebo arm, 10% of patients respond but 90% don't respond or fare worse. In this hypothetical study, the number of drug responders is twice that of placebo and could very well be statistically significant even though the overall treatment effect for all patients is clinically meaningless or even negative. GTx will have you believe achieving a positive result via the responder analysis in the enobosarm phase III trials is enough, but that's very misleading. In order to be fully transparent, GTx must also disclose the mean treatment effect for all enobosarm patients compared to all placebo patients. Vertex Pharmaceuticals ( VRTX) ran into this problem last year with a phase II study of one of its cystic fibrosis drugs. At first, the company only provided investors with responder analysis data and was sharply criticized by analysts and investors for doing so. Later, Vertex provided the mean treatment effect for each arm of the study. Watch closely to see if GTx provides the mean treatment effect for enobosarm and placebo arms of the study, particularly the stair climb power endpoint. If the company doesn't, it's hiding something. Jason B. asks: " Vanda Pharmaceuticals ( VNDA) presented today Wednesday at the JMP Securities conference. Did the company say anything to allay your concerns about its sleep drug?" No. I heard nothing from Vanda CEO Mihael Polymeropoulos that would change my bearish stance on tasimelteon's chances for FDA approval for the treatment of non-24 sleep-wake disorder. Polymeropoulos spins a tale of a close working relationship with the FDA in order to explain the incredible changes made to the tasimelteon phase III study, but I'm sorry, nothing he says rings credible. At the end of the presentation, Polymeropoulos was asked about the rationale for using tasimelteon to treat non-24 when cheap, over-the-counter melatonin is already available. His response: Our patients had access to melatonin. These melatonin are very ineffective and when effective inconsistent. The reason for this is that melatonin has been perfected by evolution to be a hormone secreted and circulated in the blood. If you were to give melatonin intravenously daily, it would work perfectly, better than anything else. But melatonin is not perfected to be an oral drug. It doesn't have the absorption, it doesn't have the dynamics to be an efficacious drug. Hence why tasimelteon truly fits an unmet medical need. Let's unwind this statement: 1. The American Academy of Sleep Medicine recommends melatonin for blind patients with non-24 due to a clinical benefit demonstrated in case reports and clinical studies. The claim that non-24 patients are without treatment options is false. 2. The oral bioavailability of melatonin is 15%. Vanda has not disclosed the oral bioavailability of tasimelteon but the oral bioavailability of Takeda's Rozerem, which like tasimelteon is a melatonin agonist, is only 2%. Before Polymeropoulous whacks melatonin for not being an effective drug for non-24, perhaps he should disclose the oral bioavailability of tasimelteon and generate credible clinical data.