This morning I could have had an article published at Seeking Alpha titled "Celldex Could Pop Up Sooner Than Expected." Pop as in pop up, due to their preliminary brain cancer results being so good that they would qualify for FDA approval without needing to complete the Phase 3 trial.
Boom. Woke up this morning with the Celldex Blues. It jumped out when I looked at my portfolio: Celldex down by about half. Had to be bad news, and it was: preliminary data said Rintega was not worth pursuing even to the normal end of the trial. Too bad for glioblastoma patients, and too bad for stockholders.
I am a stockholder. But fortunately my investments are spread out over about 30 companies, the usual big ones like Gilead and Amgen, plus a large number of development-stage companies. There was good news elsewhere in my portfolio. No point to my selling Celldex either. They have a more extensive pipeline.
But I am not about saving face. I am about investors understanding potential risks and rewards. I understood the risk. Celldex was a recent acquisition for me. I was tempted to buy more, and of course if the trial had been stopped for efficacy, I would have regretted not buying more. So it goes. I wish I had bought more biotech stocks in 2008, but I did well with what I bought in that year and in 2009.
So keep in mind, no matter how promising earlier statistics are, a later trial can fail. Even a therapy with good statistics in Phase 2 can fail in Phase 3. That is one reason a company with a broad pipeline is safer than a company with a single therapy candidate. I would have mentioned the possibility of failure, but the overall tone of the article would have understated it.
Keep in mind that in most important trials, the studies are really double blind in that data is monitored by a separate organization, so management does not see the results except at intervals.
I used to always end this column with a reminder, to myself as much as my readers, and I will do it again in at least this one column: