Biotech Values

[DewDiligence]

Handicapping ISEL:

Here is my backgammon-style likelihood analysis; other than item 6, these are ordered from worst to best for AZN (best to worst for OSIP):

1. Iressa fails to show statistically-significant increased survival relative to placebo. 16%.

2. Iressa shows an increase in median survival relative to placebo that is statistically but not clinically significant. I.e., the p-value is <.05 but the increase in median survival is less than the 33% threshold needed for the trial to hit its primary endpoint. AZN nevertheless calls the trial a success (perhaps using secondary endpoints to argue its case) while OSIP labels the trial a flop. 43%.

3. Iressa hits the 33% primary endpoint but does not come close to matching Tarceva’s 43% survival increase in the BR21 trial. AZN argues that the two drugs are equally good (and Iressa is cheaper) while OSIP continues to say that Tarceva is clearly more efficacious. 28%.

4. Iressa performs in line with the Tarceva BR21 trial. Each company says its drug is better. 11%.

5. Iressa blows everyone away with data that is clearly better than Tarceva’s. Colin Goddard resigns and Genentech makes a play to acquire OSIP on the cheap. 1.5%.

6. Miscellaneous oddball scenarios. 0.5%.

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