For pharmaceutical companies, spending hundreds of millions of dollars in drug trials is like a mining company investing in a new mine or mineral – investors don’t like the investment for the future and want more money, now.
Blood products giant CSL is the largest by far of our drug sector and yesterday it revealed plans to spend $US550 million ($A720 million) on phase three clinical trials of a new treatment aimed at preventing secondary heart attacks that hit more than one in 10 heart attack victims and can be more deadly than the initial attack.
The news (http://www.csl.com.au/newsroom/CSL-Confirms-Phase-3-Clinical-Trial-of-New-Therapy-for-Heart-Attack-Survivors.htm) saw the shares off 0.7% where they closed at $144.28.
The greedy in the markets do not understand that to have a future, companies have to invest and keep on spending – the trick is not to overspend, as our biggest mining companies like Rio Tinto or BHP Billiton did during the boom.
And like many new mining or oil and gas projects, drugs trials can take years before any results can be obtained. In CSL’s case it will be 2022 before any meaningful outcomes from the trial are known.
Investment markets do not like that level of uncertainty when a company is spending close to three quarters of a billion dollars with no assured outcome. But that’s the nature of the pharma industry.
CSL says the clinical trials of the potential breakthrough therapy, CSL112, will be the largest ever it has undertaken by, and will enroll more than 17,000 patients from approximately 1,000 sites around the world to evaluate whether the drug can reduce cardiovascular events in high-risk patients during the critical 90 day period following an attack.
Analysts say that if successful, CSL could have a blockbuster drug on its books. Bu they caution that many experimental drugs do fail at the final phase three trial stage even after successfully completing phase one and phase two trials as CSL112 has done.
Heart attacks are still the largest cause of death globally very year and in Australia, where an estimated 54,000 people are hospitalised as a result of a heart attack, CSL said yesterday.
"CSL112 has been developed by CSL’s global Research and Development team, including scientists in Australia working in collaboration with global sites and partners. The Phase 3 trial, known as ‘AEGIS-II’ (ApoA-I Event reducinG in Ischemic Syndromes II), is expected to take around four years to complete, with patient enrollment beginning in early 2018,” the company said in yesterday’s statement.
Nearly one in five survivors of an initial heart attack will experience a second heart attack, stroke or death within one year of the initial event, according to CSL.
