Southoz posts are always thoughtfuland worth a read....

Southoz posts are always thoughtfuland worth a read. Essentially, he is saying that Aug 2 is not binary. This is hisexplanation for the price being where it currently is. He says the market is forward looking andsuggests that the current price is within the ballpark of where the price willland following the FDA decision.

The problem with hisanalysis is that it assumes the market is in possession of the information &means necessary to accurately value MSB based on probabilities of approval/non approvalor some (non-binary) outcome. If you are a believer in efficient markettheory (Is there anyone out there who still is?) then the price at which MSB is selling today reflects its fair value. I do agree that the 72% figure thrown about is pretty useless because it will include many cases in which approval was eventually granted after some minor and easily resolved issues were resolved. In our case the issues were not minor, but my thinking is that they have been dealt with comprehensively, and I would say MSB prospects of getting a conditional approval are greater than that.

So I don’t accept that the market has got it right. I see Southoz as the “efficient market believing professor”:

“The efficient-market-believing professor takes a walk with a student. “Isn’t that a $10 bill lying on the ground” asks the student. “No, it can’t be a $10 bill,” answers the professor. “if it were, someone would have picked it up by now”. The professor walks away, and the student picks it up and has a beer.” (Credit to Howard Marks)

What I find interesting about Southoz’spost is the implicit acceptance that there may be legitimate ethical issuesinvolved in conducting a RCT for SRaGvHD even in adults. One thing that hasalways troubled me here is that at least one poster claiming to be a doctorseems to have been completely oblivious to the ethical issues that can arise.He never really addressed @stanjupiter thoughtful posts (even though asked tomore than once) which referred to (amongst other things) the REACH 2 authors letters tothe NEJM explaining why they were forced to use a cross-over trial design (ie. becausewithout it clinicians would have refused to enrol their patients in the trial).

Even more interesting is the possibilityraised directly by Southoz that there may not need to be a RCT in adults andthat there is scope for the FDA to agree on a design that is much quicker andless expensive to run using a propensity scored trial. That would be a fantasticoutcome, ie. approval for under 12s with agreement for a propensity scoredtrial in children and adults. As he says, quicker, cheaper and easier road to full approval for adults.