Ken Kam's Best Ideas Blog

Yesterday, after the market closed, it was announced that 2 new cases of PML have appeared among multiple sclerosis patients taking Tysabri. In 2005, Elan had to take Tysabri off the market when 3 patients came down with PML, and 2 died. At that time, the stock which had been trading at $30 lost 90% before finally reaching a bottom at $3. Shareholders who went through that experience will never forget it.

I originally bought Elan about 3 months later, in June of 2005, at $7 after I heard from about 100 multiple sclerosis patients that even if Tysabri carried a 1 out of 1,000 chance of death from PML, nearly all of them would accept that risk in order to get the improved efficacy Tysabri offers.

Over 31,000 patients have used Tysabri since it was brought back on the market a little more than 2 years ago. About 14,000 patients have been using Tysabri for more than 1 year. Even with the 2 new cases of PML, the actual risk appears to be much lower than the 1 out of 1,000 that is already printed on the FDA approved label. In addition, since both of the new patients who contracted PML are alive (one is already home), PML is no longer a death sentence.

Continue reading (with subscription) "Tysabri's Risk and Reward Tradeoff" »

Posted by Ken Kam at 05:24 PM | Permalink

The objective of a clinical trial is to see if patients treated with a new drug (the “treatment group”) do better than those who do not (the “control group”).  In most clinical trials, the control group is given a placebo so that any differences in the outcomes between the two groups can be attributed to the new drug. For this trial, however, Elan did something I think more companies should do. They gave the control group Aricept, which is the best available drug currently on the market instead of an inert placebo (which would be really cruel). This is the right thing to do for the patients in the control group, but it means the difference between the treatment group and the control group will be smaller than it otherwise might have been.

In order for a trial to be “successful”, the difference between the treatment group and the control group must be large enough to refute the possibility that it arose solely due to randomness. Scientists and regulators have generally agreed that if the difference is big enough so that there is less than a 5% chance that it is was a fluke of luck, then the trial has succeeded.

In Elan’s clinical trial, patient outcomes were measured in two ways; ADAS-cog and NTB. Using ADAS-cog, the difference between the treatment group and the control group is +2.3 (p=0.078). The “p value” of 0.078 means that probability that the difference could have arisen by chance is 7.8%. On the NTB scale, the difference was +0.13 (p=0.068).

Since there is more than a 5% chance on both measurement scales that the difference could have arisen by chance, it is fair to say that the trial did not succeed by generally agreed upon standards. After the announcement of these results, Elan’s stock dropped more than 40% which would be understandable if the drug was indeed a failure.

However, I don’t think it is accurate to conclude that the drug was a failure.

Continue reading (with subscription) "Elan's Clinical Trial Results" »

Posted by Ken Kam at 06:12 PM | Permalink