Biotech Values

[DewDiligence]

Zebra's Law revisited:

When you posted about this last December (#msg-4890815), I instructed people to print out your post and hang it on a wall as a reminder. What impressed me was not just the discussion of survivorship bias (which I like to call program-survival bias to make clear that it has nothing to do with patient survival), but also your second point, which I christened Zebra’s Law.

Here are the relevant excerpts from your December post:

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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) [Zebra’s Law]: 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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