Anthera Pharmaceuticals

In June 2012, ANTH announced that their Phase 2B trials of the drug Blisibimod failed to meet the primary endpoints, though it demonstrated a “trend towards significance.”

The pre-specified primary efficacy endpoint, clinical improvement at 24 weeks in the SLE responder index for the pooled blisibimod dose groups, was not met due to a lack of clinical efficacy in the 100mg weekly and 200mg monthly dose groups

Despite the failure, however, they elected to continue with Phase 3 trials, using only severely affected patients.

“The extensive data in the target severe population from our Phase 2 clinical program supports the initiation of a much smaller yet differentiated Phase 3 registration plan with the selected dose of blisibimod in patients with severe systemic lupus erythematosus.  We have prospectively demonstrated for the first time the possibility for a subcutaneously administered BAFF inhibitor to be used in the treatment of a severe lupus population.  The subgroup of severe patients from our Phase 2 study clearly identifies those patients most in need of therapy and most likely to benefit from our potent BAFF inhibitor blisibimod,” said Paul F. Truex, Anthera’s President and Chief Executive Officer. “Feedback from the EMA Scientific Advice process combined with an End of Phase 2 meeting in the third quarter will form the basis of our final phase 3 study designs.”

The data from this Phase 3 trial is due in Q4 of 2016.

I believe that Anthera moved to Phase 3 despite a lack of efficacy because the drug, Blisimibimod, is one of only two in their pipeline and that if the drug fails, the company crumbles with it. In the Phase 2B results, even the targeted subgroup (which they used for the Phase 3 trials) did not see a statistically significant effect from the drug.

To cap it all off, in the last 12 months, insiders have made 1 open market buy and 4 sales.

I do not recommend that you short this stock. Shorting a binary event leaves you open to catastrophic failure. Instead, purchase put options, which not only leverages your investment but also puts a cap on the total amount you can lose.

Prediction: Phase 3 Failure

Disclaimer: I hold puts on ANTH.