Danone BN FP

Failure Due to High Placebo Response A Primer on Placebos in Clinical Trials and How to De-Risk Them

It is of critical importance for investors to understand the placebo response in the diseases in which their portfolio companies are developing drugs. Failure to do so could lead to falsely assigning treatment effect as real, giving investors a wrong image of the potential and risk profile of the drug in development. Placebo rates will get highlighted in randomized trials further down the road, potentially leading to a failure of the drug and catastrophic loss for the investor.

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