I was pleasantly surprised by the Lodge Partners - Sinatra report.
It was refreshing to see a ASX sell-side analysis that wasn’t just a cookie cutter reproduction version of the previous dozen the analyst has produced. You know the kind … here are the 10 reasons to buy buy buy.
And where through some silly assumptions hidden in the financial modelling a miraculous share price target of exactly double the current share price is made. Then the analyst prays for a pump and dump so that they can claim their share targets represent some kind of fundamental valuation.
A couple of nit-picky issues with the Sinatra report …
Yep enriched designs are pretty clever. But a lot hinges on that Margolis prediction algorithm. If that doesn’t quite perform to scratch your study will inevitably be under-powered.
The other issue is that the generalizability of results from the enriched design study is always a bit problematic. And when you put this into a complicated reimbursement treatment pathway things get even murkier.
So for example in Australia as the report notes it is correct that most chronic wound care occurs in community settings (general practice). Which is reimbursed from the MBS. But only the GPs time is covered – not the cost of the wound dressing.
Efficiencies drive toward the lowest cost dressing / treatment – not the best or most effective one. Perverse incentives operate … funding is activity based – not cure based. Even where the patient has the financial means for the better dressing … you can’t charge for consumables if the patient is bulk billed; and that’s the group a lot of your chronic wounds are in.
So it’s all very complicated for a HTA group or MSAC to get their head around reimbursement based on data from enriched trial designs.
Having said all this in the US stronger price signals exist to reward quality community care that produce lower hospital costs – and therefore better bottom line for HMOs. But in this case you will often see cost-effectiveness studies performed as a follow-up to an enrichment study to aid translation for reimbursement.
I am being ultra nit-picky. It was great reading a report that was an intellectual stretch; and I’m scraping the bottom of the barrel for the negatives.
As an aside for the NEU fans here – I think there is an interesting parallel.
I believe Acadia has taken on trof for Retts P3 because of their expertise in enriched designs – specifically the randomised withdrawal design. In this design all participants will receive trof. After X weeks non-responders exit from the study. Responders are then randomised to placebo / trof. It’s a fascinating design approach that has made me a little more bullish about that trof P3 trial.
The problem that occurred was that NEU told everyone that P3 was a walk in the park. No design cleverness was needed. Wrong. Here in FFT the painful design lessons of the past have been learned and addressed in a transparent way for investors.
So FTT is an interesting punt. In a just world this cleverness should be rewarded but the trial gods are not always just. And the markets even less so. But I hope they pull it off; it would a great win in more ways than one.
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