Anyone actively involved in the biotech Twitter or blogosphere knows the saga of Jeremy Richards, Keryx Biopharmaceuticals (KERX) and AEterna Zentaris (AEZS). After Richards published this article, essentially promising that the drugs would be approved and claiming large share purchases by the mysterious "Dr. Williams," shares skyrocketed much to the disgust of many professional analysts. Today, the two companies lost 2/3rds of their value when they announced that their colorectal cancer drug perifosine did not increase overall survival in its phase 3 trial. Adam Feuerstein of TheStreet.com wrote a great article today outlining the drug failure and the warning signs.
Today's news is yet another warning to make sure you do your due diligence, don't listen to pump-and-dumps, and always understand the risks.