After a scathing short report triggered a landslide for Genscript’s stock and forced it to halt trading, the company has managed to salvage some of that loss with a response issued Friday morning.
In the statement, Genscript kicked back against the allegations leveled against Nanjing Legend Biotech, its subsidiary developing a J&J-partnered CAR-T therapy. Their Hong Kong-listed shares has risen almost 16% from the lowest point Thursday.
“The company denies all allegations against the company in the report,” the statement reads. “The claims in the report are misleading, biased, selective, inaccurate and incomplete, containing baseless allegations and irresponsible conjecture. The company does not have any information on Flaming Research, and has no record of Flaming Research contacting our management.”
Top among the attacks: Legend manipulated the data that took ASCO by surprise in 2017.
Flaming Research, the obscure firm credited for the short report, wrote that Legend’s CAR-T data came from three “well recognized hematology hospitals” in Shanghai and Jiangsu, and one mediocre hospital in Xi’an. But it was the researchers in Xi’an who offered the most compelling data, whereas the data from the other sites didn’t hold up.
That’s not selective disclosure at all, Genscript says; the reason why they didn’t present anything from Shanghai and Jiangsu at ASCO was that the trials started after conference data were due. And when they did publish the data at ASH later that year, the overall response rate was still 100%.
Of the 11 cases of refractory multiple myeloma reported, they point out, eight achieved stringent complete response (73%), two achieved very good partial response, and one achieved partial response.
Flaming Research also got some basic facts wrong in their report, Genscript says. For instance, it claimed Legend’s CAR-T employs the CD28 costimulatory domain when it in fact uses 4-1BB.
The company also stands by its R&D team — led by Legend founder and CSO Xiaohu Fan — its IP prospects and the way it handled its death reporting, pointing to US and China IND clearances as evidence of its clean regulatory record.
The incident, widely reported by Chinese media, also raises questions about the volatility of the HKEX at a critical time as non-revenue biotechs start going public on the exchange and investors have their eyes opened about the ups and downs of drug development.
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