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Aeterna Zentaris Inc. Message Board

  • membersincenow membersincenow Jan 11, 2012 10:41 PM Flag

    Question re Feue-Ratain Rule

    {The study looked at 59 Phase III trials over the past 10 years and came to a rather concrete conclusion. Companies with a market cap of under $300 million several months before the release of trial results were 0 for 21, whereas companies with a market cap exceeding $1 billion were a respectable 21 for 27.}

    So, according to this analysis, there was only 21 P3 studies completed by companies that were under a $300 million cap? Only just over 2 P3s a year over a ten year period by this group?

    {{3.Between June 2007 and April 2008, 50 new medicines have been approved by the FDA in the United States.}}

    http://www.ciscrp.org/professional/facts_pat.html

    Now, for just this condensed time period and the approved drugs within it there had to have been at least 50 completed P3s, correct? That's not even including the failed P3s within that period either.
    Who decided what trials went into the Feue-Ratain analysis? Were they cherry picked to fit the model, or were they randomly sampled? There is no explanation of how this sampling of P3s were arrived at in the original AF article. Anyone out there have any info to share on this?

    http://www.thestreet.com/story/11277181/1/biotech-stock-mailbag-keryx-pharma.html

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    • Looks like it was his first attempt;and outside of admitting that he used a completely wrong drug to reference as competition for perifosine,not one word of response to the avalanche of criticism he received.
      Choosing to write that the day before this conference was also an incredibly poor choice.
      Little Adam at least timed it to an AEZS breakout.

    • You can see those articles have little to no effect on pps now anyway. Any semi-intellegent investor knows the deal by now.

      The latest MF article was kind of funny though. He couldn't even bash properly and made tremendously flawed statements. I'm a bull on perifosine and I could bring better bear arguments than he could.

    • Since you guys are discussing it... you should go back and read the original publication of the AF-R Rule.

      First, let me state that although in articles, Feuerstein is cited at a "biotech expert" at the street, he does not have an education in biology, health, or investing. He is a dude with a bachelors degree who went to work as a writer to make a buck. Now, there is nothing wrong with that, but if he is going to make extraordinary claims, he needs to back it with real proof.

      So, to try to make a name for himself, AF attempted to write a "scientific" paper... but he chose the lazy way out.

      People are asking where he got his sample group and how he did his research.

      If you look at his original article, you will see that what he did was take another study about stock price movement prior to an event announcement. This Rothenstein at al. study was seeking to show that there was trading happening based on insider information.

      What AF did was simply take the list of companies, google the number of shares outstanding, multiply by the price and then "show" that companies below $300m did not have successful trial results.

      There are many flaws with what he did. I agree he has a point that smaller cap companies are probably less likely to succeed simply because the really promising ones either get bought out or have appreciation of market cap... but the list of studies comes from a very narrow window during which drug companies had much higher valuation. The list is also limited to oncology drugs, which isn't really relevant to the thesis and is an arbitrary sub group perhaps chosen to make the point (much the same criticism he levels against perifosine P2 trials).

      Finally, I wonder how many of those companies that were just above $300m had an incessant "writer" keep bashing their stock for 6 months prior to trial results, and if they had had such a person, how their market cap may have been different.

      Certainly no one is saying investing in small cap biotechs with upcoming binary events isn't risky. But this article has been rehashed and discussed so many times that it is getting ridiculous. I doubt there is any real investor who has done their DD that does not know about this... so the constant reprinting of it in different (and progressively more inaccurate) forms is ridiculous.

    • The validity of "studies" put into circulation for the general investment community should always be questioned. If a study is valid it will hold up to critique, but if it is not then it should be dismissed and the motives of the one(s) who presented it in the first place should be publicly examined. Any poster that tries to convince anyone that there is not a clear attempt at damaging KERX/AEZS with this "study" printed first in the Street and now in the Fool, has either their head in the sand or is short the stock, IMO.

    • Remember we are talking only oncology here.

 
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