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PARS valuation.

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zebra4o1   Monday, 12/20/04 09:49:09 PM
Re: drbio45 post# 5969
Post # of 228428 
PARS valuation.

I don't understand why the price of PARS is holding above a dollar either. All they have left now is at most 60 cents per share in cash and a preclinical pain program - but a preclinical program based on a now discredited platform. Is there something I am missing here? Honestly, I felt almost thankful to be able to get out at $1.20 - slinking away with my tail between my legs.

It's really just amazing how often late stage trials end up showing absolutely no efficacy at all. Here are my two favorite explanations for this phenomenon:

1) Survivorship Bias: Take 1000 drug candidates and put them through a phase 1. Just by chance, 100 of these will show statistically significant results at p = 0.1. Take those 100 and do a phase 2. Again, just be random chance, 10 of these 100 will show statistically significant results at p= 0.1. Finally, put these 10 ‘survivors’ into a phase 3, and you will end up very disappointed with the trial results.

2) Small, underfunded biotechs simply cannot afford to stop development of their lead drug candidate. Even if they know it is not working, even if they have something 100 times more powerful in the lab, they have to press forward. Otherwise they will not be able to raise more money. So they end up doing trials that should never be done.





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