Ariad Pharmaceuticals Inc fka ARIA

[DonShimoda]

In the past, many drugs were approved on the basis of evidence of tumor shrinkage. However, the FDA now is looking for clear evidence of increased overall survival. With this increased importance on OS, the situation may only get worse in terms of time to market.

I may be mistaken but I seem to recall that historically roughly 1/2 of drugs that make it to P3 eventually get approved while only 75% of NDA's ultimately get approved. fyi, a list of Failed Phase III Cancer Trials in 2010 can be found here: http://knol.google.com/k/krishan-maggon/new-drug-approvals-fda-ema-2010/3fy5eowy8suq3/129#Failed_Phase_III_Cancer_Trials_in_2010

The FDA only approved 21 new drugs in 2010 compared to 25 in 2009 and 21 NME approved in 2008. With 2 drugs this close to the finish line and a market cap of less than $1 billion, the market is, imo, significantly mispricing the ARIA opportunity at current share levels.