Macugen panel outcomes –let’s play backgammon!
>> I disagree with your thumbs up as a modest negative. <<
I’d like to follow up on my reply in #3358. Have you checked to see if your set of expectations is mathematically consistent with itself? The set of positive and negative outcomes for GENR, weighted by their respective probabilities, must net out to no change.
To illustrate, let me add more detail to my own set of expectations set forth in #3351. I have four outcomes:
1. The Macugen panel asks for more safety data because of issues related to endophthalmitis or intravitreal injections. I estimate that this outcome increases the underlying value of GENR’s AMD program by 20%, and I further estimate that the probability of this outcome is 13%.
2. The panel asks for more safety data because of issues related to systemic affects of blocking VEGF. This outcome decreases the underlying value of GENR’s AMD program by 10% and has a probability of 1% (IMO).
3. The panel gives Macugen an unconditional thumbs-up. This outcome decreases the underlying value of GENR’s AMD program by 5% (due to the additional competition) and it has a probability of 70% (IMO).
4. All other outcomes. This catchall category increases the underlying value of GENR’s AMD program by 6.25% and has a probability of 16% (IMO).
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Now let’s do the consistency check; the probability-weighted sum of the four cases is:
0.13(1.20)+0.01(0.90)+0.70(0.95)+0.16(1.0625)
=1.00 (i.e. no net change) as required for consistency.
Now, let’s go back to your set of expectations. I fail to see how you can have a mathematically consistent set of expectations if you consider an unconditional thumbs-up by the panel to be positive for GENR. What exactly are the negative outcomes for GENR in your set of expectations?
“The efficient-market hypothesis may be
the foremost piece of B.S. ever promulgated
in any area of human knowledge!”
