So Your Biotech Announced Positive Phase 3 Results? Celebrating Could be Premature
Investors know that drug development is an expensive and risky endeavor. Most drug candidates fail clinical trials, which is why the direct research and development necessary for each drug candidate that finally makes it to market costs hundreds of millions of dollars. That makes successful drug candidates exceedingly rare and valuable assets, especially for development-stage pharmaceutical companies that lack product revenue.
Yet while most discussions about drug development consider late-stage clinical trials to be the ultimate end goal for investors, the reality is a little more complicated. Successful outcomes in phase 3 studies don't guarantee success on the market.
Investors have found this out the hard way with Puma Biotechnology (NASDAQ: PBYI), Aerie Pharmaceuticals (NASDAQ: AERI), and Rigel Pharmaceuticals (NASDAQ: RIGL), among others. Can investors glean any patterns from these case studies so they know how to avoid -- or mitigate -- these mistakes with the pharma stocks they own?
Source Fool.com
