Irreproducible Results, Inc.

The press release went out at 1:05 p.m. last Thursday, March 26, and heralded big things for OvaScience (OVAS), a barely 3-year-old company based in Cambridge, Massachusetts, that is making quite a splash peddling a pair of seemingly revolutionary procedures to assist women struggling with conception.

The company, which didn’t exist five years ago outside of the ideas in a Harvard Medical School professor’s journal articles, touted its 53 percent success rate in one of the first fertility clinics offering its AUGMENT treatment, appeared to have once again checked off a box on what has been a very fast track to success.

Indeed, by any yardstick, OvaScience’s first few years of existence should make any management team green with envy. Wall Street’s brokerage analysts are supportive of the company’s every move, investors had bid its share price steadily northward and national media provide a ready forum for management’s message.

At the center of it all is the Longwood Fund, a small venture capital outfit that raised the seed capital to get OvaScience launched. A pair of equity offerings later, the fund’s three partners have a 19.5 percent ownership stake in the company currently then worth just above $185 million.

(Stripped down, AUGMENT is a procedure where mitochondria—the energy-generating organelles within a cell—are co-injected with sperm during an in vitro fertilization procedure called intracytoplasmic sperm injection, or ICSI. The company's theory is that the mitochondria injected from the women's ovarian lining stem cells stimulates eggs whose energy levels are diminished.)

From a business perspective, with a frantically motivated patient base and at a cost of up to $25,000 per treatment (in addition to the $10,000-$15,000 a patient can expect to pay to her physician for IVF), it's clear AUGMENT could be potentially lucrative.

But a funny thing happened on March 27: As OvaScience’s chief executive officer Michelle Dipp began a conference call around 10 a.m., recounting what the company described as encouraging news about AUGMENT’s effectiveness, the company’s shares were beginning a price collapse that would see them drop nearly 10 percent on the day, or $4.82, to $43.47.

It was a long week indeed at Longwood’s offices on Boston’s Boylston Street, as the price collapse knocked almost $300 million of market capitalization off the stock, $58 million or so of which belonged to Dipp and her partners.

OVAS_Px

 

So what spooked investors?

A good place to start was OvaScience’s release itself. The company claimed that 17 women had received the embryo transfer and 9 became clinically pregnant for a 53 percent success rate. But reading the release more closely shows that 26 women got the treatment and, of them, 7 were able to successfully deliver a child for just under a 27 percent success rate.

Investors, it appears, drew a very different conclusion of what these results meant.

More importantly, given the absence of a control group, or a group of women who didn’t receive OvaScience’s treatment, discerning whether these results are troubling or promising is unknowable. Since it’s not a formal study, calculating results that might ordinarily depart from industry norms, like ignoring the full amount of women receiving the treatment, is perfectly feasible. The results can then be interpreted in a host of different ways which Dipp seized on, proclaiming at the end of the release: “Our AUGMENT treatment is having a positive impact on pregnancy rates in a variety of women who are struggling with infertility.”

Notwithstanding the difficulty posed by the absence of a control group, the Centers for Disease Control’s archive of assisted reproductive technology statistics suggests at least a broad idea of what the press release’s reported effects mean.

The median age of the women receiving OvaScience’s treatment in the Toronto clinic was 33 years old, with an average of two previous IVF treatment cycle failures.

According to the CDC in 2012 — the most recent year available for data — of the women studied who were 35 and under who failed two prior IVF treatment cycles and received IVF with fresh non-donor eggs or embryos, 33 percent were expected to deliver a live birth.

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Michele Kalker 5 years ago Member's comment

Great post.