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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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March 9, 2010

Hope Darn Well Springs Eternal

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Posted by Derek

Well, it takes all kinds to make a market. And the collapse in Medivation's shares after their disastrous Phase III results the other day seem to have brought out some hopeful buyers. Take this guy:

. . .I'm telling you right now, I believe that sell-off has gone twice as deep as good sense can justify. At least, that's the way I see it.

First off, we should understand that drug trials are Medivation's business. Clinical trials are what the company does. This failed phase 3 study isn't to be considered a crash into a brick wall. It's not a crippling lawsuit. It's not the loss of a major customer account. It's simply a sudden downshift, a temporary change of gears. In many ways, for Medivation, it's just one facet of business as usual.

As I look at Medivation's one-year and three-year performance charts, the opening to invest is just screaming at me. . .

All I can say is "Go for it, chief!" I might just add, very quietly, that early-stage drug discovery is not really the kind of business where one-year and three-year stock performance is much of a guide. And it's also worth remembering that although clinical trials are indeed what drug companies do, we try not to do big honking Phase III face-plants. You don't start clinical trials that you think are going to end that way, so a crash into a brick wall is actually not a bad analogy.

But hey - the dented hubcaps have just about finished wobbling around into the dust, and who knows, the stock might actually bounce back up a little bit, thanks to the brave and the foolhardy. But if Medivation is ever to make it back to where it was, I don't see how it's going to be because of Dimebon.

Via RJAlvarez on Twitter, who says "Tough call, but this is perhaps the worst post recommending a biotch stock I've ever read."

Comments (6) + TrackBacks (0) | Category: Business and Markets | Clinical Trials


1. Chemjobber on March 9, 2010 9:34 AM writes...

"biotch" - Freudian typo.

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2. Henning Makholm on March 9, 2010 1:37 PM writes...

It looks like this guy has been taken in by the high-tech meme of "our greatest asset is the collective smarts of our employees". Which is actually true for some industries; software in particular. And we all know that biotech is the software of the future, right?

If I understand correctly, failures such as this do not reflect badly on the actual people at Medivation that were part of it -- it was a "shit happens" crash, not an incompetence-driven crash. So a weak mind might well be tempted to think that if they still has as smart and competent a workforce as they had last month, their ability to earn money in the future must be essentially unharmed.

This of course requires that one is ignorant of how much capital has been sunk into a project that goes poof at this stage.

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3. Skeptic on March 9, 2010 2:30 PM writes...

Failure is the name of the game. Another one, Isis Pharmaceuticals, has been failing for *20* years. Here's a youngin in the 20 year failure plan: Alnylam Pharmaceuticals.

There is a reason Nature started a new rag called Chemical Biology. No more "I'm a chemist proper" disownership. The "Drug works, whata a little liver damage?" party is over.

Either med chems can de-risk small molecule drug development by validating drug targets or they should shut up about the crooks in management.

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4. Boghog on March 9, 2010 2:47 PM writes...

They still have other things in the pipeline. This one so far look pretty impressive:


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5. Skeptic on March 9, 2010 4:55 PM writes...

Funny thing is Software Engineer is way more off-shorable than Chemist according to Alan Blinders list. No way you can algorithmize Software Design and there's practically no overhead.

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6. Imike on March 11, 2010 2:38 PM writes...

Perhaps the dose of dimebon was just too low and other trials with higher dose will work.

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