Repros Therapeutics Inc (RPRX)

[DewDiligence]

Re: Probability of success in anemia

There are three main ways that clinical trials such as these can fail:

1. The true efficacy of the drug is less than what was observed in phase-2. In general, this is more likely to happen than many investors realize. The reason is program-survival bias — in the aggregate, the efficacy seen in phase-2 trials of programs that are advanced to phase-3 is biased high relative to the true efficacy of the drugs in question. (This is trivially because drugs which perform badly in phase-2 generally don’t get advanced to phase-3.)

2. An excessive number of dropouts and protocol violations occurs. The statistical power of a trial, reported to investors as 85% in the case of RPRX’s anemia trials, is highly sensitive to modeled assumptions about dropouts and protocol violations; consequently, the reported power (85% in this case) is not especially illuminating without knowing how dropouts and protocol violations have been modeled. Other posters have commented on the heightened risk of protocol violations at trial sites in Third World countries. Offsetting this to some degree is a relatively low risk of excessive dropouts in the anemia trials compared to a typical phase-3 trial, IMO.

3. A bizarre but serious side effect shows up. The side effect need not even be plausibly related to the investigational drug to wreak havoc. A case in point is CEPH’s phase-3 trial for Sparlon; the FDA rejected the Sparlon NDA because of a single case of Stevens-Johnson Syndrome even though there is no plausible link between Sparlon and SJS and CEPH did not even agree that SJS had been observed in the trial.