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DewDiligence

09/16/10 4:11 PM

#104420 RE: DewDiligence #104414

(ARNA)—Animal Testing 101

I’ve been perusing the ARNA board on InvestorVillage, where I see many of the “usual suspects” (i.e. the kinds of posters who were pumping GNVC and DCTH earlier this year). In reading the posts on that board, it’s evident that many biotech investors do not understand the science that underlies animal testing. Here are two canards that appear to have gained widespread popularity among this group of investors:

1. “Carcinogenicity in animals doesn’t matter if it hasn’t been seen in human trials.” Wrong! Human cancers typically take decades to develop, so it would be surprising indeed to see a significant cancer signal in a 2-year trial, which was the duration of the phase-3 Lorcaserin studies.

2. “Toxicity and carcinogenicity in animals don’t matter if they occur at doses many times higher than the therapeutic dose for humans.” Wrong again. Very high doses can induce toxicities at a higher frequency than you would see at therapeutic dose levels, which allows the number of tested animals to be kept at a manageable level. If companies limited their animal-tox testing to dose levels comparable to the therapeutic dose in humans, then to ferret out toxicities that occurred on average, say, once in ten thousand animals, you would need to test more than ten thousand animals. That’s simply not practical.
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DewDiligence

09/16/10 4:23 PM

#104422 RE: DewDiligence #104414

The big winner today: OREX +38%. This is the 1-day chart (ARNA’s panel voted down Lorcaserin a few minutes after 3pm):



Did anyone on this board play OREX today? It looks like it was easy money for those who knew the Lorcaserin outcome was a forgone conclusion.