Podcast: "How Wall Street Reacts When a Patient Dies in a Clinical Trial"

Summary

There exists an important link between scientifically proving a drug’s efficacy and safety and maintaining the confidence of investors who fund the clinical trials; one without the other likely means the drug will fail. When the drug company Zafgen entered the third stage of clinical trials for their drug, Beloranib (originally used to treat cancer, then tested for weight loss efficacy and, ultimately, the treatment of the rare Prader-Willi Syndrome which causes insatiable hunger in children), the death of two patients lead to investors pulling out and stock prices plummeting from $35/share to $7. Despite proof that both deaths were caused by a common condition to Prader-Willi patients not receiving treatment, investor confidence appears to be shaken and share prices have not returned to their original value. For small drug companies, like Zafgen, who do not have multiple high-dollar revenue streams or alternative, ongoing research opportunities, the results of a patient death (including long-term holds placed on future trials and subsequent loss of investor support) often mean the end of the business and the drugs for which patients throughout the country have been waiting.

Link to Podcast: https://www.statnews.com/2016/04/04/podcast-clinical-trial-death/