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You know, let's just declare this "Sketchy Biotech Day" around here. A reader sends along this intriguing news item from Maryland regarding Rexahn Pharmaceuticals (NYSEMKT:RNN). They recently reported clinical data on their lead compound, Serdaxin:

On Tuesday, the Rockville company reported the drug performed well in a phase 2a clinical trial for treating patients with one such ailment: major depressive disorder. But the announcement also said "the overall study did not achieve statistical significance," worrying investors and sending Rexahn's stock price tumbling from $3.53 to $1.76 that day.

Wednesday morning, executives felt compelled to issue a follow-up statement, offering "additional commentary, clarifications and insights" to allay investors' concerns. That apparently did the trick — at least somewhat. By the end of trading on Wednesday, the price had rebounded to $2.15. By Thursday morning, shares had climbed to $2.51; they were trading at $2.47 Thursday afternoon.

In its initial statement, Rexahn said that results from the trial, which enrolled 77 patients at several sites in the U.S., "are compelling and warrant further study in a larger phase 2 trial."

Well, to me, "compelling" clinical trial numbers are a hard thing to sell without the statistics to back them up. But that's not slowing these folks down. Here I offer you what is perhaps the most breathtaking rationalization I have yet heard about drug development - and mind you, that is saying a lot. Says Rexahn's CEO:

"Based on the feedback and reaction from our shareholders, stakeholders and other market participants, it is clear that neither the purpose of the Serdaxin trial or its results were well understood.

"The purpose of the Serdaxin Phase IIa trial was to establish, as a proof of concept, that Serdaxin can work as an antidepressant drug for patients suffering from Major Depressive Disorder," Ahn said. "I am happy to say that this is exactly what the study accomplished. The trial results unambiguously reach the conclusion that patients, especially those suffering from severe depression, respond positively to Serdaxin.

"Some market participants have asked us why our overall trial results were not statistically significant," he said. "The answer is simply that the Serdaxin study was never designed to achieve statistical significance as a primary objective, but rather to establish a positive signal among treated patients. This is exactly what the trial succeeded in accomplishing."

So here you have it: a clinical trial that was, apparently, not designed to show statistical significance. And it didn't! Champagne for everyone! Think of how many other drugs have had results just this compelling, but we've all just been too stupid to realize what we had. Throw open the pharma mausoleums and let the dead compounds come forth!

Perhaps some day we'll all look back on this event as the Day the Drug Industry Changed Forever. Or perhaps it's time to ask just what Serdaxin is. . .well, you'll never guess. It's clavulanic acid. (See, I told you that you wouldn't get it). Yep, the beta-lactamase inhibitor that's given as part of Augmentin, to overcome resistant strains of bacteria. Weirdly, it does seem to penetrate the blood-brain barrier, which is not something I would have guessed. And the Rexahn people have done some animal studies that suggest it has anxiolytic effects (as well as effects on sexual arousal, which they're not ignoring: that, friends, is the drug development candidate Zoraxel on their web site. Still clavulanic acid, though, but a rose by any other name..).

But none of that means a thing unless you achieve results in humans. And though I hate to contradict such a visionary mind as Dr. Ahn's, I'm afraid I'm going to have to hold out for statistical significance. And wonder, in the meantime, if any of the zillions of people who've taken clavulanate before ever noticed any elevation in their mood. Never happened to me, that's for sure..

Source: Rexahn Pharma Presents a Landmark in Clinical Trial Data Interpretation