Biotech Values

[DewDiligence]

> GTOP – One possible explanation is that since this approval is being sought on the basis of a single registrational trial, the hurdle becomes .025, instead of .05 when two such trials are run.<

In a strictly arithmetic sense, the appropriate hurdle when there is only one pivotal trial would be 0.0025 (0.05^2), not 0.025. However, the FDA rarely holds a sponsor to such a stringent threshold and usually gives at least 0.01 of cumulative p-value for a trial no matter what.

The fact that GTOP’s SPA allows approval based on one pivotal trial rather than the usual two is almost certainly the reason that the p-value allocation in the trial is less than 0.05.