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I've had my share of faceplants with red thumbs on oncology stocks, so I certainly won't be following up this red thumb with an actual short. Nevertheless, I found the monster spike in Puma after the announcement of I-SPY2 results to be something of a headscratcher. This adaptive trial tested several different regimens that included lead candidate PB272 against different histologic subtypes of breast cancer in the neoadjuvant setting. The findings of one of these therapeutic regimens against one histologic subtype indicated a high likelihood of success if tested in a phase III trial. I'm not an expert on probability, but I have a hard time seeing how a type I error can be avoided when so many combinations are being tested. Just as in a post-hoc subset analysis where so many subsets are analyzed that one is almost certain to reach stat sig, it seems the same effect can occur prospectively.Even if I'm misunderstanding the Bayesian probability basis of the I-SPY trial, Puma is now valued at 2.5B based on a single phase II trial, and their pipeline contains only PB272 in clinical trials. There's a lot that can go wrong between here and FDA approval, including emergence of significant dose-limiting toxicity or a lack of efficacy in phase III. Once again, way to dangerous to short, but a judicious red thumb in CAPS.
Bound to have some selloff at these prices
This small Bio Tech company is onto key medicine break through.
IBD EPS, RS, SPROE, Acc ratings plus P/E and div yieldMEDICAL 1 96 -- A- NO EARN
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