Amid buzz around a short sell­er’s FBI vis­it, MiMedx stock craters fol­low­ing in­ter­nal in­ves­ti­ga­tion

A bio­phar­ma in Geor­gia tied to an un­usu­al FBI sto­ry is watch­ing its stock tum­ble this morn­ing fol­low­ing news that the com­pa­ny is launch­ing an in­ves­ti­ga­tion in­to its own prac­tices.

The com­pa­ny, called MiMedx $MDXG, has been in­volved in a nasty re­la­tion­ship with short sell­ers that re­cent­ly took a turn for the worse. Now, the com­pa­ny’s in­ter­nal in­ves­ti­ga­tion is de­lay­ing the re­lease of its fi­nan­cial re­sults, in­clud­ing its an­nu­al state­ment that would de­tail last year’s per­for­mance.

In­vestors aren’t hap­py. The stock has fall­en more than 31% as of press time Tues­day morn­ing.

This is the kind of ac­tiv­i­ty that will like­ly make short sell­ers cheer. An in­ter­est­ing de­vel­op­ment con­sid­er­ing the com­pa­ny’s re­cent his­to­ry.

Park­er “Pe­te” Pe­tit

Just days ago, news broke that a Cal­i­for­nia short sell­er named Marc Co­hodes had re­ceived a vis­it from FBI agents at his home in Sono­ma Coun­ty. Co­hodes has laid out his crit­i­cism of MiMedx all over the web, in­clud­ing hun­dreds of tweets that tear down MiMedx and the com­pa­ny’s CEO, Park­er “Pe­te” Pe­tit. What did these tweets look like? “I will bury the lit­tle fel­la in a shoe box,” one says from Oc­to­ber.

The FBI showed up at Co­hodes’ home with a print­out of some ug­ly tweets made months ear­li­er, in­clud­ing the one above. In short, the agents told the short sell­er he should stop send­ing threat­en­ing tweets about the CEO, or else.

That’s ac­cord­ing to a sto­ry from Bloomberg, which notes that Pe­tit, the lam­bast­ed CEO, hap­pens to be a top Re­pub­li­can fundrais­er in the state of Geor­gia. The re­quest to dis­patch FBI agents came from the At­lanta of­fice. Co­hodes’ lawyer called that in­to ques­tion in a Jan­u­ary 12 com­plaint let­ter to the Jus­tice De­part­ment.

“As part of your in­ves­ti­ga­tion, you should de­ter­mine how Mr. Pe­tit was able to in­flu­ence the FBI to take ac­tion de­signed to sti­fle one of his com­pa­ny’s crit­ics,” at­tor­ney David Shapiro wrote.

Marc Co­hodes. Im­age: BNN

This is not the first time MiMedx has drawn the ire of oth­ers. The com­pa­ny, which makes tis­sue grafts used to treat burns and soft tis­sue wounds, has faced law­suits brought by ex-em­ploy­ees who al­lege the com­pa­ny has fraud­u­lent­ly boost­ed its sales. It’s spent sev­er­al years chal­leng­ing the FDA, which says its grafts don’t meet reg­u­la­to­ry stan­dards.

Now, MiMedx is ad­dress­ing those con­cerns head on. The com­pa­ny’s au­dit com­mit­tee has hired le­gal and ac­count­ing ad­vis­ers to con­duct an in­ter­nal in­ves­ti­ga­tion of the al­le­ga­tions re­lat­ing to sales and dis­tri­b­u­tion. Ex­ec­u­tives are al­so re­view­ing the ac­count­ing treat­ment of cer­tain dis­trib­u­tor con­tracts, among oth­er items.

“The com­pa­ny be­lieves, based on in­for­ma­tion avail­able to date, that the out­come of such in­ves­ti­ga­tion should not have a ma­te­r­i­al im­pact on rev­enue guid­ance for 2018,” reads a state­ment.

The top 10 block­buster drugs in the late-stage pipeline — Eval­u­ate adds 6 new ther­a­pies to heavy-hit­ter list

Vertex comes in for a substantial amount of criticism for its no-holds-barred tactical approach toward wresting the price it wants for its commercial drugs in Europe. But the flip side of that coin is a highly admired R&D and commercial operation that regularly wins kudos from analysts for their ability to engineer greater cash flow from the breakthrough drugs they create.

Both aspects needed for success in this business are on display in the program backing Vertex’s triple for cystic fibrosis. VX-659/VX-445 + Tezacaftor + Ivacaftor — it’s been whittled down to 445 now — was singled out by Evaluate Pharma as the late-stage therapy most likely to win the crown for drug sales in 5 years, with a projected peak revenue forecast of $4.3 billion.

The latest annual list, which you can see here in their latest world preview, includes a roster of some of the most closely watched development programs in biopharma. And Evaluate has added 6 must-watch experimental drugs to the top 10 as drugs fail or go on to a first approval. With apologies to the list maker, I revamped this to rank the top 10 by projected 2024 sales, instead of Evaluate's net present value rankings.

It's how we roll at Endpoints News.

Here is a quick summary of the rest of the top 10:

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How small- to mid-sized biotechs can adopt pa­tient cen­tric­i­ty in their on­col­o­gy tri­als

By Lucy Clos­sick Thom­son, Se­nior Di­rec­tor of On­col­o­gy Pro­ject Man­age­ment, Icon

Clin­i­cal tri­als in on­col­o­gy can be cost­ly and chal­leng­ing to man­age. One fac­tor that could re­duce costs and re­duce bar­ri­ers is har­ness­ing the pa­tient voice in tri­al de­sign to help ac­cel­er­ate pa­tient en­roll­ment. Now is the time to adopt pa­tient-cen­tric strate­gies that not on­ly fo­cus on pa­tient needs, but al­so can main­tain cost ef­fi­cien­cy.

John Reed at JPM 2019. Jeff Rumans for Endpoints News

Sanofi's John Reed con­tin­ues to re­or­ga­nize R&D, cut­ting 466 jobs while boost­ing can­cer, gene ther­a­py re­search

The R&D reorganization inside Sanofi is continuing, more than a year after the pharma giant brought in John Reed to head the research arm of the Paris-based company.
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UP­DAT­ED: Chica­go biotech ar­gues blue­bird, Third Rock 'killed' its ri­val, pi­o­neer­ing tha­lassemia gene ther­a­py in law­suit

Blue­bird bio $BLUE chief Nick Leschly court­ed con­tro­ver­sy last week when he re­vealed the com­pa­ny’s be­ta tha­lassemia treat­ment will car­ry a jaw-drop­ping $1.8 mil­lion price tag over a 5-year pe­ri­od in Eu­rope — mak­ing it the plan­et’s sec­ond most ex­pen­sive ther­a­py be­hind No­var­tis’ $NVS fresh­ly ap­proved spinal mus­cu­lar at­ro­phy ther­a­py, Zol­gens­ma, at $2.1 mil­lion. A Chica­go biotech, mean­while, has been fum­ing at the side­lines. In a law­suit filed ear­li­er this month, Er­rant Gene Ther­a­peu­tics al­leged that blue­bird and ven­ture cap­i­tal group Third Rock un­law­ful­ly prised a vi­ral vec­tor, de­vel­oped in part­ner­ship with the Memo­r­i­al Sloan Ket­ter­ing Can­cer Cen­ter (MSK), from its grasp, and thwart­ed the de­vel­op­ment of its sem­i­nal gene ther­a­py.

A new num­ber 1 drug? Keytru­da tapped to top the 10 biggest block­busters on the world stage by 2024

Analysts may be fretting about Keytruda’s longterm prospects as a host of rival therapies elbow their way to the market. But the folks at Evaluate Pharma are confident that last year’s $7 billion earner is headed for glory, tapping it to beat out the current #1 therapy Humira as AbbVie watches that franchise swoon over the next 5 years.

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John Chiminski, Catalent CEO - File Photo

'It's a growth play': Catal­ent ac­quires Bris­tol-My­er­s' Eu­ro­pean launch pad, ex­pand­ing glob­al CD­MO ops

Catalent is staying on the growth track.

Just two months after committing $1.2 billion to pick up Paragon and take a deep dive into the sizzling hot gene therapy manufacturing sector, the CDMO is bouncing right back with a deal to buy out Bristol-Myers’ central launchpad for new therapies in Europe, acquiring a complex in Anagni, Italy, southwest of Rome, that will significantly expand its capacity on the continent.

There are no terms being offered, but this is no small deal. The Anagni campus employs some 700 staffers, and Catalent is planning to go right in — once the deal closes late this year — with a blueprint to build up the operations further as they expand on oral solid, biologics, and sterile product manufacturing and packaging.

This is an uncommon deal, Catalent CEO John Chiminski tells me. But it offers a shortcut for rapid growth that cuts years out of developing a green fields project. That’s time Catalent doesn’t have as the industry undergoes unprecedented expansion around the world.

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Step­ping on Roche's toes, Mer­ck cuts in­to SCLC niche with third-line Keytru­da OK

In the in­creas­ing­ly crowd­ed check­point race, small cell lung can­cer has been a rare area where Roche, a sec­ond run­ner-up, has a lead over the en­trenched lead­ers Mer­ck and Bris­tol-My­ers Squibb. But Mer­ck is fi­nal­ly mak­ing some head­way in that di­rec­tion with the lat­est ap­proval for its PD-1 star.

The lat­est green light en­dors­es Keytru­da in the third-line treat­ment of metasta­t­ic SCLC, where it would be giv­en to pa­tients whose dis­ease ei­ther don’t re­spond to or re­lapse af­ter chemother­a­py, which would have fol­lowed at least one pri­or line of ther­a­py.

Arc­turus ex­pands col­lab­o­ra­tion, adding $30M cash; Ku­ra shoots for $100M raise

→  Rare dis­ease play­er Ul­tragenyx $RARE is ex­pand­ing its al­liance with Arc­turus $ARCT, pay­ing $24 mil­lion for eq­ui­ty and an­oth­er $6 mil­lion in an up­front as the two part­ners ex­pand their col­lab­o­ra­tion to in­clude up to 12 tar­gets. “This ex­pand­ed col­lab­o­ra­tion fur­ther so­lid­i­fies our mR­NA plat­form by adding ad­di­tion­al tar­gets and ex­pand­ing our abil­i­ty to po­ten­tial­ly treat more dis­eases,” said Emil Kakkis, the CEO at Ul­tragenyx. “We are pleased with the progress of our on­go­ing col­lab­o­ra­tion. Our most ad­vanced mR­NA pro­gram, UX053 for the treat­ment of Glyco­gen Stor­age Dis­ease Type III, is ex­pect­ed to move in­to the clin­ic next year, and we look for­ward to fur­ther build­ing up­on the ini­tial suc­cess of this part­ner­ship.”

Neil Woodford. Woodford Investment Management via YouTube

Wood­ford braces po­lit­i­cal storm as UK fi­nan­cial reg­u­la­tors scru­ti­nize fund sus­pen­sion

The shock of Neil Wood­ford’s de­ci­sion to block with­drawals for his flag­ship fund is still rip­pling through the rest of his port­fo­lio — and be­yond. Un­der po­lit­i­cal pres­sure, UK fi­nan­cial reg­u­la­tors are now tak­ing a hard look while in­vestors con­tin­ue to flee.

In a re­sponse let­ter to an MP, the Fi­nan­cial Con­duct Au­thor­i­ty re­vealed that it’s opened an in­ves­ti­ga­tion in­to the sus­pen­sion fol­low­ing months of en­gage­ment with Link Fund So­lu­tions, which tech­ni­cal­ly del­e­gat­ed Wood­ford’s firm to man­age its funds.