Investors need to give
Onyx Pharmaceuticals (Nasdaq: ONXX) a break.
Yes, its phase 2 trial didn't show a statistically
significant effect of Nexavar compared to placebo in breast
cancer, but it certainly doesn't warrant the 9% decrease in
Onyx's stock since the results were released.
It was just a phase 2 trial, after all. The purpose of the
midstage trial is to get enough information to see whether a
larger phase 3 trial is warranted. Sure, sometimes a drug can
hit a jackpot in a phase 2 trial -- Nexavar
didin an earlier breast cancer trial -- but most phase 2
trials are small enough that it's hard to see a statistical
difference. Heck, some companies --
hey there,
Genzyme (Nasdaq: GENZ) and
Johnson & Johnson (NYSE: JNJ) -- run
trials without placebo controls. At least we have something
to compare the effectiveness of Nexavar with.
According to the company, Nexavar combined with
Bristol-Myers Squibb 's (NYSE: BMY) Taxol
"demonstrated a positive trend towards improvement of
progression-free survival" compared to Taxol alone. That's
probably good enough to warrant a phase 3 trial.
Onyx still has two more phase 2 breast cancer trials in
the works. One is an add-on therapy with
Eli Lilly 's (NYSE: LLY) Gemzar or Roche's
Xeloda, and the other tests Nexavar plus
sanofi-aventis ' (NYSE: SNY) Taxotere and/or
Novartis ' (NYSE: NVS) Femara. Considering
the strong results from the first trial, and a positive trend
in the second, it seems likely that the trials will turn out
positive enough to warrant moving into a phase 3 trial.
Investors looking for a better price to get into Onyx have
just been handed a
gift, as far as I can tell.
This article was originally published as
Geez, Lighten Up, Mr. Market!on
Fool.com
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