Analyze any failure long enough and you might find a success.
Allergan PLC Wednesday night reported data from a mid-stage trial of Botox in treating major depressive disorder and announced it planned to run a bigger trial for the drug. The rather significant wrinkle is that the drug didn't clearly succeed in the smaller trial.
Allergan is trying to transform itself into a more-conventional drugmaker after an M&A-driven history. But the industry's too-common tendency to push iffy Phase 2 trials into Phase 3 isn't something the company should emulate.
Continuing to expand or shore up Botox sales is key for Allergan. The wrinkle- and migraine-reducing injection accounted for nearly a fifth of the company's revenue in 2016. Analysts expect Botox to still be Allergan's largest drug in 2022, and to be its fastest-growing drug between now and then. Failure to meet such expectations would leave Allergan over-reliant on newer drugs and some risky bets in its pipeline.
In the Phase 2 trial, Botox failed to prove statistical superiority to a placebo in women with major depressive disorder in two different doses. The smaller dose showed some benefit, the bigger one showed none at all, which adds further confusion.
Allergan suggests a bigger and more tightly run trial will give the drug a better chance of success. But such reasoning has been used to justify many Phase 3 trials that have gone on to fail. The best justification for starting a Phase 3 trial will always be a slam-dunk Phase 2. Anything else likely involves some element of cherry-picking data to support a pre-selected conclusion.
Getting FDA approval for Botox to treat depression could add untold billions to its sales, which helps explain the urge to look at trial data through rose-tinted glasses. And it is possible the bigger trial could surprise to the upside. Drugs do sometimes succeed after failing earlier trials, and depression studies are particularly tricky.
But in a world where even stellar Phase 2 trials lead to failed Phase 3s, Allergan seems to be throwing good money after bad.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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