Ar­rest­ed and charged with fraud, Pixar­Bio CEO Frank Reynolds could face up to 20 years in prison

A cu­ri­ous se­ries of set­backs at Pixar­Bio has cul­mi­nat­ed in the ar­rest of and charges against CEO Frank Reynolds and two of his as­so­ciates, the SEC an­nounced to­day.

Frank Reynolds

Reynolds, 51, was charged by crim­i­nal com­plaint with se­cu­ri­ties fraud along­side Jay Herod and Ken­neth Strom­s­land. Ac­cord­ing to the com­plaint, the trio al­leged­ly be­gan de­fraud­ing in­vestors as soon as Reynolds found­ed the com­pa­ny in Au­gust 2013, “by mak­ing false and mis­lead­ing state­ments about the com­pa­ny — its prospects, its fi­nanc­ing, and the back­ground and track record of Reynolds — and by en­gag­ing in ma­nip­u­la­tive trad­ing of its shares.”

An ex­am­ple of those state­ments came in the form of an email and mem­o­ran­dum to po­ten­tial in­vestors, in which Reynolds promised “a HUGE re­turn on in­vest­ment (ROI)” based on a mar­ket val­ue of $1 bil­lion dol­lars. In re­al­i­ty, the com­plaint states, Pixar­Bio did not have such mar­ket val­ue, or, as it claims, a prod­uct to end “thou­sands of years of mor­phine and opi­ate ad­dic­tion.”

From the US At­tor­ney’s Of­fice in Mass­a­chu­setts:

Rather, the com­plaint al­leges, the prospec­tive drug, car­ba­mazepine, is not a treat­ment for opi­ate ad­dic­tion at all, but an ex­ist­ing drug for which Pixar­Bio pur­port­ed to have de­vel­oped an ad­di­tion­al means of de­liv­ery, via in­jec­tion, in a time-re­lease form.

Pixar­Bio $PXRB re­verse-merged its way to the OTC mar­ket in Au­gust 2016. About three months lat­er, Herod and Strom­land al­leged­ly be­gan trad­ing its stock in a way that “sim­u­lat­ed mar­ket in­ter­est and ar­ti­fi­cial­ly pushed up the trad­ing price,” us­ing tech­niques known as “matched trad­ing” and “mark­ing the close.”

Last year, when End­points News re­port­ed that the biotech was forced to give up its leased prop­er­ty in Mass­a­chu­setts and lay off half of its staff as it bled cash and grap­pled with an SEC fraud in­ves­ti­ga­tion, Reynolds re­spond­ed with a lengthy state­ment deny­ing any wrong­do­ing.

“We’ve en­joyed the en­gage­ment with the SEC,” he wrote. “I have an ex­cel­lent SEC com­pli­ance ed­u­ca­tion and SEC com­pli­ance ex­pe­ri­ence so we’ve all learned a lot about fu­ture SEC com­pli­ance to en­sure we’ll avoid fu­ture re­views. We have nev­er been ac­cused of Fraud as [Boston Busi­ness Jour­nal re­porter Max Sten­dahl] stat­ed, so we were shocked to read it but we’ll wrap up the SEC re­view and move for­ward to­ward FDA ap­proval.”

Boast­ing its tech­nol­o­gy’s roots in the lab of MIT pro­fes­sor Bob Langer, the com­pa­ny pre­vi­ous­ly pre­dict­ed an ap­proval and mar­ket launch for its pain treat­ment in 2018.

Now, as Reynolds, Herod and Strom­s­land face a judge in the Dis­trict Court of Mass­a­chu­setts, they are look­ing at a max­i­mum fine of $5 mil­lion and a sen­tence of no greater than 20 years in prison if con­vict­ed.

Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

Bet­ter than Am­bi­en? Min­er­va soars on PhI­Ib up­date on sel­torex­ant for in­som­nia

A month af­ter roil­ing in­vestors with what skep­tics dis­miss as cher­ry pick­ing of its de­pres­sion da­ta, Min­er­va is back with a clean slate of da­ta from its Phase IIb in­som­nia tri­al.

In a de­tailed up­date, the Waltham, MA-based biotech said sel­torex­ant (MIN-202) hit both the pri­ma­ry and sev­er­al sec­ondary end­points, ef­fec­tive­ly im­prov­ing sleep in­duc­tion and pro­long­ing sleep du­ra­tion. In­ves­ti­ga­tors made a point to note that the ef­fects were con­sis­tent across the adult and el­der­ly pop­u­la­tions, with the lat­ter more prone to the sleep dis­or­der.

Gene ther­a­py biotech sees its stock rock­et high­er on promis­ing re­sults for rare cas­es of but­ter­fly dis­ease

Shares of Krys­tal Biotech took off this morn­ing $KRYS af­ter the lit­tle biotech re­port­ed promis­ing re­sults from its gene ther­a­py to treat a rare skin dis­ease called epi­der­mol­y­sis bul­losa.

Fo­cus­ing on an up­date with 4 new pa­tients, re­searchers spot­light­ed the suc­cess of KB103 in clos­ing some stub­born wounds. Krys­tal says that of 4 re­cur­ring and 2 chron­ic skin wounds treat­ed with the gene ther­a­py, the KB103 group saw the clo­sure of 5. The 6th — a chron­ic wound, de­fined as a wound that had re­mained open for more than 12 weeks — was par­tial­ly closed. That brings the to­tal so far to 8 treat­ed wounds, with 7 clo­sures.

UP­DAT­ED: In sur­prise switch, Bris­tol-My­ers is sell­ing off block­buster Ote­zla, promis­ing to com­plete Cel­gene ac­qui­si­tion — just lat­er

Apart from revealing its checkpoint inhibitor Opdivo blew a big liver cancer study on Monday, Bristol-Myers Squibb said its plans to swallow Celgene requires the divestiture of the blockbuster psoriasis treatment Otezla to keep the Federal Trade Commission (FTC) at bay. That’s delaying the completion of the buyout, which the pharma giant says now may not be done before early 2020, rather than Q3 as promised. And the news quickly blew a hole in its stock price as investors reacted to the surprise switch up in plans.

Celgene’s Otezla, approved in 2014 for psoriasis and psoriatic arthritis, is a rising star. It generated global sales of $1.6 billion last year, up from the nearly $1.3 billion in 2017. But Bristol’s rival oral TYK2 psoriasis drug is in late-stage development, after the firm posted encouraging mid-stage data on the drug, BMS-986165, last fall. And Bristol-Myers is sticking with its experimental drug, discounting Otezla’s future.

That’s not what the analysts were expecting.

Endpoints News

Basic subscription required

Unlock this story instantly and join 53,300+ biopharma pros reading Endpoints daily — and it's free.

Fol­low­ing news of job cuts in Eu­ro­pean R&D ops, Sanofi con­firms it’s of­fer­ing US work­ers an 'ear­ly ex­it'

Ear­li­er in the week we learned that Sanofi was bring­ing out the bud­get ax to trim 466 R&D jobs in Eu­rope, re­tool­ing its ap­proach to car­dio as re­search chief John Reed beefed up their work in can­cer and gene ther­a­pies. And we’re end­ing the week with news that the phar­ma gi­ant has al­so been qui­et­ly re­duc­ing staff in the US, tar­get­ing hun­dreds of jobs as the com­pa­ny push­es vol­un­tary buy­outs with a fo­cus on R&D sup­port ser­vices.

Ab­b­Vie gets a green light to re­sume re­cruit­ing pa­tients for one myelo­ma study — but Ven­clex­ta re­mains un­der a cloud

Three months af­ter reg­u­la­tors at the FDA forced Ab­b­Vie to halt en­rolling pa­tients in its tri­als of a com­bi­na­tion us­ing Ven­clex­ta (vene­to­clax) to treat drug-re­sis­tant cas­es of mul­ti­ple myelo­ma, the agency has green-light­ed the re­sump­tion of one of those stud­ies, while keep­ing the rest on the side­lines.

The CANO­VA (M13-494) study can now get back in busi­ness re­cruit­ing pa­tients to test the drug for a pop­u­la­tion that shares a par­tic­u­lar ge­net­ic bio­mark­er. To get that per­mis­sion, Ab­b­Vie — which is part­nered with Roche on this pro­gram — was forced to re­vise the pro­to­col, mak­ing un­spec­i­fied changes in­volv­ing risk mit­i­ga­tion mea­sures, pro­to­col-spec­i­fied guide­lines and an up­dat­ed fu­til­i­ty cri­te­ria.

Bris­tol-My­ers star Op­di­vo fails sur­vival test in a matchup with Nex­avar aimed at shak­ing up the big HCC mar­ket

Bris­tol-My­ers Squibb has suf­fered an­oth­er painful set­back in its years-long quest to ex­pand the reach of Op­di­vo. The phar­ma gi­ant this morn­ing not­ed that their Check­mate-459 study com­par­ing Op­di­vo with Bay­er’s Nex­avar in front­line cas­es of he­pa­to­cel­lu­lar car­ci­no­ma — the most com­mon form of liv­er can­cer — failed to hit the pri­ma­ry end­point on over­all sur­vival.

This was a sig­nif­i­cant mile­stone in Bris­tol-My­ers’ tal­ly of PD-1 cat­a­lysts this year. Nex­avar (so­rafenib) has been the stan­dard of care in front­line HCC for the past decade, though Op­di­vo has been mak­ing head­way in sec­ond-line HCC cas­es, where it’s go­ing toe-to-toe with Bay­er’s Sti­var­ga (re­go­rafenib) af­ter re­cent ap­provals shook up the mar­ket.

Why would the FDA ap­prove an­oth­er con­tro­ver­sial drug to spur a woman’s li­bido with these da­ta? And why no ex­pert pan­el re­view?

AMAG Pharmaceuticals’ newly approved drug for spurring women’s sexual desire may never make much money, but it’s a big hit at sparking media attention.

The therapy — Vyleesi (bremelanotide) — got the green light from regulators on Friday evening, swiftly lighting up a range of stories around the world, from The New York Times to The Guardian. Several headlines inevitably referred to it as the “female Viagra,” invoking Pfizer’s old erectile dysfunction blockbuster.

But the two drugs have little in common.

Endpoints News

Basic subscription required

Unlock this story instantly and join 53,300+ biopharma pros reading Endpoints daily — and it's free.

Mike Grey. Mirum

In $86M IPO pitch, Mirum spells out plans to turn Shire dis­cards in­to or­phan liv­er drug suc­cess­es

Mike Grey doesn’t have any time to waste. Hav­ing re­gained con­trol of two liv­er dis­ease drugs from Shire and po­si­tioned them for piv­otal stud­ies — five years af­ter first hand­ing them off in a deal to sell Lu­me­na, where he was CEO — Grey is steer­ing Mirum straight in­to an IPO with a $86 mil­lion ask.

Not that Mirum has spent much of its $120 mil­lion Se­ries A cash since launch­ing last No­vem­ber. Ac­cord­ing to the S-1, the Cal­i­forn­ian biotech has burned through $23.3 mil­lion as of March, but ex­pects ex­pens­es to pick up once their clin­i­cal work gath­ers steam.