About once a year or so, a particular clinical disaster induces us to pause and take the pulse of our clinical thinking, and to ask if we need to revise our own internal models of how things should get done. While there was enough bad news last week to float a ship on tears, the specific event that raised our antennae was the failure of The Liposome Co. Inc.'s Ventus liposomal prostaglandin E1 in patients with acute respiratory distress syndrome (ARDS). And the tidbit that raised questions was the fact that LIPO went straight into Phase III studies after a single, small Phase II trial.

The perennial problem for biotech, of course, is that investors want to get something for their money within their lifetimes. That argues for pushing compounds through the clinic fast, and taking a chance on the home run in Phase III. On the other hand, one can justifiably wonder if the sector will continue to be able to attract funds if it can't show some greater degree of reliability in its clinical results - especially as companies mature and can presumably afford to follow a more conservative clinical path.