The other side of drug development

dwtf_lgBringing a new drug to market is very expensive. There is a lot at stake and investors follow the process closely. For the record, Monday morning biotech stock market quarterbacks or financial analysts are driving my nuts. When I try to research drug development news and updates, there is probably 10 articles by these market analysts for every 1 clinical or scientific one. It’s like search engine SPAM. This one came to my inbox this morning and is almost depressing. ASH 2013 just wrapped up a week ago. There are no good , effective FDA approved treatments for my particular chromosomal mutation. For me, this drug IPI-145 seems to be working miracles in managing my disease but to the analysts, it’s too little too late in a market that seems to be getting crowded in recent months.

Why Investors Are Writing Off Infinity Pharma

Looking back to the beginning of 2013 it was thought that Infinity had the best in class PI3K inhibitor and the development lead held by Gilead could be overcome with better efficacy. ASCO threw a giant wrench in that thesis as many started to worry about the higher rates of serious infections (although this is another story as the rates were similar to idelalisib.)  Regardless of whether the rates were higher or not, the fact was IPI-145 was no longer seen as a clearly better drug. Thus the development lead of Gilead became a much larger hurdle.

ASH was the chance to present additional data that highlighted both the improved efficacy of IPI-145 and allay concerns over the rate of infections. Given the extremely negative sentiment, this seemed like a good contrarian bet (assuming good data). In many ways, IPI-145 held up its end of the bargain as the data were fine but the stock continues to sell. Why?

The issue was that many saw the data as good as, but not obviously better than, idelalisib. The consensus was that it was not nearly enough to overcome the development lead and commercial experience of Gilead. As such, sentiment went beyond negative.  How can sentiment move beyond extremely bearish? It moves into indifference and that was what I detected at ASH. People wrote off IPI-145.

Way to ruin a good thing. Fooey on you guys!


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