realistic expectations, page-42

G'day Chris and Fly,

Not trying to be inflammatory here. I like ACL, I like Fonda and I like HyAct. The scientific rationale for HyAct is solid and the phase-II data is encouraging.

I'll try to address your points as best I can.

The aim of the current mCRC trial is a successful marketing authorization application with the US-FDA. On that basis, the risk of failure can be carved up into outcome- and design- risks. Outcome risk is the chance of failing to meet trial endpoints; and design risk is the chance that the FDA calls for further investigation and data.

So why do I have issues with the design? The current trial has two major design risks. The first is that the primary endpoint is progression free survival (PFS) rather than overall survival (OS) and the second is that there are no US recruitment sites. These elements of the trial design do not preclude a successful outcome, but they do heighten the risk that further studies will be required by the FDA. Sure, there are examples where candidate drugs have been approved for oncology indications using data from PFS trials, but there are usually nuances like a dearth of therapy, long overall survival times, rare diseases, or previous approvals that justify PFS over OS. This is an important point that I think too many people overlook. Audeo are doing what a lot of underfunded biotechs do. Scrimping on cost/time at the peril of trial integrity. While this is rational short-term behavior (by management), it often costs in the long run. There are many, many examples of short-cut phase-III trials that have turned out to be nothing more than a solid phase-IIb. What this means in the end is that more funds are required than investors budget for and that more time passes before approval than investors had anticipated.

So, it's not that I think that the trial is going to fail. No not at all. It's that the risk of impedance (failure or delay) due to design shortcuts are under appreciated by local investors......but picked up on by US investors.

I'll be watching ACL closely and hope to get back in at some point.

Cheers!