For­mer MiMedx CEO and COO are con­vict­ed on fraud, con­spir­a­cy charges

The MiMedx saga — which has in­clud­ed a months-long in­ves­ti­ga­tion, FBI in­volve­ment and al­le­ga­tions that the com­pa­ny fraud­u­lent­ly boost­ed its sales — has re­sult­ed in the con­vic­tion of two for­mer ex­ec­u­tives. But it isn’t quite over yet.

Park­er “Pe­te” Pe­tit

For­mer CEO Park­er “Pe­te” Pe­tit and for­mer COO William Tay­lor have been con­vict­ed on a se­cu­ri­ties fraud count and a con­spir­a­cy count, re­spec­tive­ly, in the South­ern Dis­trict Court of New York. The Man­hat­tan US at­tor­ney’s of­fice ac­cused the men of false­ly re­port­ing $9.5 mil­lion of rev­enue in 2015 to boost the com­pa­ny’s stock and fill their own pig­gy banks, per a Law360 re­port.

But the de­fen­dants have de­nied the ac­cu­sa­tions, and say they plan on ap­peal­ing the ver­dict. Pe­tit was ac­quit­ted on a se­cu­ri­ties fraud count, while Tay­lor was ac­quit­ted on a fraud count.

William “Bill” Tay­lor

“We are pleased that the ju­ry ac­quit­ted Mr. Tay­lor of se­cu­ri­ties fraud. We are of course dis­ap­point­ed in the ver­dict on the con­spir­a­cy count, but Mr. Tay­lor ful­ly in­tends to seek to have the ver­dict over­turned,” Tay­lor’s lawyer William Bur­ck told Law360.

MiMedx $MDXG, which pro­duces sur­gi­cal and tis­sue-graft prod­ucts for vet­er­ans and mil­i­tary hos­pi­tals, ran in­to trou­ble back in Feb­ru­ary of 2018, when the FBI showed up at the door of Marc Co­hodes. The vo­cal short sell­er had in­sult­ed the com­pa­ny and Pe­tit in hun­dreds of tweets. Af­ter FBI agents or­dered Co­hodes to stop, his lawyer went to the US De­part­ment of Jus­tice with a com­plaint.

The DOJ seemed to be al­ready in­ves­ti­gat­ing MiMedx’s sales and dis­tri­b­u­tion prac­tices. The com­pa­ny faced law­suits brought by ex-em­ploy­ees who ac­cused it of fraud­u­lent­ly boost­ing sales. And it spent sev­er­al years chal­leng­ing the FDA on whether its prod­ucts met reg­u­la­to­ry stan­dards.

MiMedx said it was con­duct­ing an in­ter­nal in­ves­ti­ga­tion in Feb­ru­ary of 2018, and that it would re­state its fi­nan­cial state­ments go­ing back six years. It part­ed ways with Pe­tit and Tay­lor and slashed 24% of its work­force to start a “new chap­ter.” By No­vem­ber, it delist­ed from Nas­daq.

The in­ter­nal in­ves­ti­ga­tion, con­duct­ed by King & Spald­ing with KP­MG as an au­di­tor, turned up a slew of ac­cu­sa­tions, in­clud­ing that MiMedx made ma­te­r­i­al mis­state­ments and omis­sions about its deals, that Pe­tit lied un­der oath when dis­cussing its largest dis­trib­u­tor, and that the com­pa­ny’s ac­tions were “de­signed to ma­nip­u­late the tim­ing and recog­ni­tion of rev­enue.”

The com­pa­ny’s shares, which once trad­ed at a high of $16.75, closed at $6.79 apiece on Thurs­day.

What comes next for the for­mer ex­ecs? Pe­tit is sched­uled for sen­tenc­ing on Feb 23, and Tay­lor is due back the fol­low­ing day. Pe­tit could be look­ing at up to 20 years for the se­cu­ri­ties fraud count, while Tay­lor’s con­spir­a­cy count could land him up to 5 years.

Biogen CEO Michel Vounatsos (via Getty Images)

With ad­u­canum­ab caught on a cliff, Bio­gen’s Michel Vounatsos bets bil­lions on an­oth­er high-risk neu­ro play

With its FDA pitch on the Alzheimer’s drug aducanumab hanging perilously close to disaster, Biogen is rolling the dice on a $3.1 billion deal that brings in commercial rights to one of the other spotlight neuro drugs in late-stage development — after it already failed its first Phase III.

The big biotech has turned to Sage Therapeutics for its latest deal, close to a year after the crushing failure of Sage-217, now dubbed zuranolone, in the MOUNTAIN study.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 94,300+ biopharma pros reading Endpoints daily — and it's free.

Pascal Soriot (AP Images)

As­traZeneca, Ox­ford on the de­fen­sive as skep­tics dis­miss 70% av­er­age ef­fi­ca­cy for Covid-19 vac­cine

On the third straight Monday that the world wakes up to positive vaccine news, AstraZeneca and Oxford are declaring a new Phase III milestone in the fight against the pandemic. Not everyone is convinced they will play a big part, though.

With an average efficacy of 70%, the headline number struck analysts as less impressive than the 95% and 94.5% protection that Pfizer/BioNTech and Moderna have boasted in the past two weeks, respectively. But the British partners say they have several other bright spots going for their candidate. One of the two dosing regimens tested in Phase III showed a better profile, bringing efficacy up to 90%; the adenovirus vector-based vaccine requires minimal refrigeration, which may mean easier distribution; and AstraZeneca has pledged to sell it at a fraction of the price that the other two vaccine developers are charging.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 94,300+ biopharma pros reading Endpoints daily — and it's free.

Jason Kelly, Ginkgo Bioworks CEO (Kyle Grillot/Bloomberg via Getty Images)

Af­ter Ko­dak de­ba­cle, US lends $1.1B to a syn­thet­ic bi­ol­o­gy com­pa­ny and their big Covid-19, mR­NA plans

In mid-August, as Kodak’s $765 million government-backed push into drug manufacturing slowly fell apart in national headlines, Ginkgo Bioworks CEO Jason Kelly got a message from his company’s government liaison: HHS wanted to know if they, too, might want a loan.

The government’s decision to lend Kodak three quarters of a billion dollars raised eyebrows because Kodak had never made drugs before. But Ginkgo, while not a manufacturing company, had spent the last decade refining new ways to produce materials inside cells and building automated facilities across Boston.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 94,300+ biopharma pros reading Endpoints daily — and it's free.

The ad­u­canum­ab co­nun­drum: The PhI­II failed a clear reg­u­la­to­ry stan­dard, but no one is cer­tain what that means any­more at the FDA

Eighteen days ago, virtually all of the outside experts on an FDA adcomm got together to mug the agency’s Billy Dunn and the Biogen team when they presented their upbeat assessment on aducanumab. But here we are, more than 2 weeks later, and the ongoing debate over that Alzheimer’s drug’s fate continues unabated.

Instead of simply ruling out any chance of an approval, the logical conclusion based on what we heard during that session, a series of questionable approvals that preceded the controversy over the agency’s recent EUA decisions has come back to haunt the FDA, where the power of precedent is leaving an opening some experts believe can still be exploited by the big biotech.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

John Maraganore, Alnylam CEO (Scott Eisen/Bloomberg via Getty Images)

Al­ny­lam gets the green light from the FDA for drug #3 — and CEO John Maraganore is ready to roll

Score another early win at the FDA for Alnylam.

The FDA put out word today that the agency has approved its third drug, lumasiran, for primary hyperoxaluria type 1, better known as PH1. The news comes just 4 days after the European Commission took the lead in offering a green light.

An ultra rare genetic condition, Alnylam CEO John Maraganore says there are only some 1,000 to 1,700 patients in the US and Europe at any particular point. The patients, mostly kids, suffer from an overproduction of oxalate in the liver that spurs the development of kidney stones, right through to end stage kidney disease.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 94,300+ biopharma pros reading Endpoints daily — and it's free.

Bob Nelsen (Photo by Michael Kovac/Getty Images)

Bob Nelsen rais­es $800M and re­cruits a star-stud­ded board to build the 'Fox­con­n' of biotech

Bob Nelsen spent his pandemic spring in his Seattle home, talking on the phone with Luciana Borio, the scientist who used to run pandemic preparedness on the National Security Council, and fuming with her about the dire state of American manufacturing.

Companies were rushing to develop vaccines and antibodies for the new virus, but even if they succeeded, there was no immediate supply chain or infrastructure to mass-produce them in a way that could make a dent in the outbreak.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 94,300+ biopharma pros reading Endpoints daily — and it's free.

Frank Zhang (AP Images)

Plot thick­ens around Leg­end Biotech, Gen­Script with founder Frank Zhang's ar­rest

Two months after Legend Biotech made the startling disclosure that founder and then-CEO Frank Zhang was placed under “residential surveillance,” its parent company revealed that he’s been formally arrested.

Zhang — who, since founding GenScript 18 years ago, has taken the CRO public and groomed Legend Biotech in-house until the J&J-partnered CAR-T player was mature enough for its own Nasdaq listing — is severing his final ties with both. He is resigning as board chair/non-executive director of GenScript and director of Legend.

Carl Hansen, AbCellera CEO (University of British Columbia)

From a pair of Air Jor­dans to a $200M-plus IPO, Carl Hansen is craft­ing an overnight R&D for­tune fu­eled by Covid-19

Back in the summer of 2019, Carl Hansen left his post as a professor at the University of British Columbia to go full time as the CEO at a low-profile antibody shop he had founded called AbCellera.

As biotech CEOs go, even after a fundraise Hansen wasn’t paid a whole heck of a lot. He ended up earning right at $250,000 for the year. His compensation package included a loan — which he later paid back — and a pair of Air Jordan tennis shoes. His newly-hired CFO, Andrew Booth, got a sweeter pay packet than that — which included his own pair of Air Jordans.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

In fi­nal days at Mer­ck, Roger Perl­mut­ter bets big on a lit­tle-known Covid-19 treat­ment

Roger Perlmutter is spending his last days at Merck, well, spending.

Two weeks after snapping up the antibody-drug conjugate biotech VelosBio for $2.75 billion, Merck announced today that it had purchased OncoImmune and its experimental Covid-19 drug for $425 million. The drug, known as CD24Fc, appeared to reduce the risk of respiratory failure or death in severe Covid-19 patients by 50% in a 203-person Phase III trial, OncoImmune said in September.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 94,300+ biopharma pros reading Endpoints daily — and it's free.