The Diamyd case serves as a good lesson in risk management and accepting the existence of unknown risk. I doubt anyone marketed the case as risk-free, though I considered it a good risk/reward. The case at this point wasn’t based on the drug’s value proposition being revolutionary in treating stage 3 disease, but rather on a Phase 3 hit looking probable. In any case, despite previous successful studies, Phase 3 failed to replicate earlier results, not even in the same direction; the result was zero. Even those hindsight commentators haven’t been able to pinpoint the reason for this, let alone a priori identifying this significant possibility with valid reasoning. If Pekka Pouta predicts sunshine with 90% probability but it rains – was he right or wrong?
So – always remember unknown risk (= a risk that exists but cannot be identified). I personally suspect the reason is protocol deviations. I kept my personal risk moderate; the allocation to shares + warrants was ultimately less than 4%, so the end result at this point is “a slightly tougher than usual day on the Helsinki exchange.”