The "Feuerstein-Ratain Rule" worked

Very interesting analysis of the colon-cancer drug failure. It does-not matter the name of the drug and even the name of the company, even that the drug was against cancer. The author dug into deepest details of the failure and made a lot of interesting observation.

But first let the author (Feuerstein) to describe the "Feuerstein-Ratain Rule":

“After examining 59 phase III clinical trials of cancer drugs going back 10 years, we found companies with micro-cap market valuations (i.e market caps less than $300 million) had no chance of producing positive phase III study results. … By contrast, almost 80% of cancer drug companies with market values greater than $1 billion conducted positive phase III studies.”

You can argue that it is not fair but here comes the logical explanation:

“Ratain and I recognized that one reason micro-cap cancer drug had a perfectly dismal record with phase III trials is because the drugs being developed had already been vetted by both the market (i.e., investors) and larger, more successful cancer drug companies and found to have a low probability of success.

Cancer drugs are scarce and valuable commodities. Larger drug companies are way more likely to acquire, or at least partner with, a smaller drug company if that smaller company has a cancer drug in development with a strong shot at being successful.

Market cap, therefore, becomes a reliable and accurate proxy for predicting cancer drug trial outcomes.”

Well, we can go further and state that this information is valuable from another point of view – phase III is not the field for partisan war. The partisans of Death Valley are very efficient up to phase II but then they have to be merged by more powerful player – of course in case if they are interested in successful launching of their drug. And in this way Big Pharma persists and flourishes… Forever…