In a re­mote Ver­mont ski town, 3 ex­ecs raised $93M for a stem cell re­search cam­pus. Pros­e­cu­tors say it was all just a scam

Jay Peak ski re­sort Jay Peak re­sort

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Pe­ter Shum­lin Twit­ter

The Jay Peak ski re­sort isn’t the most like­ly place you’d find a biotech re­search cam­pus de­vot­ed to stem cell re­search and the de­vel­op­ment of ar­ti­fi­cial or­gans. Set in the rugged moun­tain area in Ver­mont’s North­east King­dom, it’s just a few miles from the Cana­di­an bor­der. And its slopes bring in skiers from the world over.

Just not a lot of biotech ex­ecs, un­less they’re com­ing to hit the black di­a­monds.

Ariel Quiros HCA East Flori­da via Youtube

Nev­er­the­less, a re­sort own­er and two of his al­leged ac­com­plices man­aged to raise $93 mil­lion to back con­struc­tion of a biotech fa­cil­i­ty that was wide­ly her­ald­ed as a big jobs cre­ator. Even for­mer gov­er­nor Pe­ter Shum­lin tout­ed the project, anx­ious to be aligned with an ac­tive de­vel­op­er as re­sort own­er Ariel Quiros and pres­i­dent Bill Stenger pre­sent­ed them­selves as.

But this week, a year af­ter set­tling charges lev­eled by the SEC, Ver­mont U.S. At­tor­ney Christi­na Nolan said it was all just a crim­i­nal con job, wrapped in lies. Quiros, Stenger and Ko­re­an part­ner Jong Weon Choi were in­dict­ed by a Grand Ju­ry on the scam charges, which out­line a scheme to siphon off much of the mon­ey they raised to pay off loans or line their pock­ets.

Christi­na Nolan US De­part­ment of Jus­tice

In late 2013, Quiros, in par­tic­u­lar, was out on a ledge as Ray­mond James de­mand­ed re­pay­ment of a $21 mil­lion loan. Ac­cord­ing to the charges, he got that out of the biotech stash they had cre­at­ed through an EB-5 pro­gram — a fed­er­al plan that pro­vides for­eign­ers with a quick path to per­ma­nent res­i­den­cy if they make an “at-risk” in­vest­ment in the US that cre­ates at least 10 jobs.

To do that, pros­e­cu­tors al­lege, the de­fen­dants came up with a pho­ny es­ti­mate of the num­ber of jobs that would be cre­at­ed. And they pre­sent­ed plans to make mon­ey from stem cell prod­ucts and ar­ti­fi­cial or­gans as part of their busi­ness plan.

The de­fen­dants mis­rep­re­sent­ed their abil­i­ty to mar­ket a heart re­gen­er­a­tion stem cell ther­a­py prod­uct. The prod­uct was not com­mer­cial­ly vi­able and the de­fen­dants had no rights to such a prod­uct.

Bill Stenger Jay Peak Re­sort via Youtube

In fact, there were no stem cell prod­ucts, ac­cord­ing to the in­dict­ment. There was no re­search. And they didn’t try to find a prod­uct. Same goes for the ar­ti­fi­cial or­gans they were go­ing to sell, ac­cord­ing to the plans they laid out in 2012 — a time when the bloom was al­ready off the first rose of stem cell R&D.

Stenger and Quiros plead­ed not guilty to the 14 charges, and their at­tor­ney vowed to pull out all the stops to prove their in­no­cence. Ac­cord­ing to the fed­er­al pros­e­cu­tor, Jong Weon Choi is still at large.


Im­age: Shut­ter­stock

So­cial Me­dia Im­age: Ariel Quiros HCA East Flori­da via Youtube and Bill Stenger Jay Peak Re­sort via Youtube

Brian Kaspar. AveXis via Twitter

AveX­is sci­en­tif­ic founder fires back at No­var­tis CEO Vas Narasimhan, 'cat­e­gor­i­cal­ly de­nies any wrong­do­ing'

Brian Kaspar’s head was among the first to roll at Novartis after company execs became aware of the fact that manipulated data had been included in its application for Zolgensma, now the world’s most expensive therapy.

But in his first public response, the scientific founder at AveXis — acquired by Novartis for $8.7 billion — is firing back. And he says that not only was he not involved in any wrongdoing, he’s ready to defend his name as needed.

I reached out to Brian Kaspar after Novartis put out word that he and his brother Allen had been axed in mid-May, two months after the company became aware of the allegations related to manipulated data. His response came back through his attorneys.

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We­bi­nar: Re­al World End­points — the brave new world com­ing in build­ing fran­chise ther­a­pies

Several biopharma companies have been working on expanding drug labels through the use of real world endpoints, combing through the data to find evidence of a drug’s efficacy for particular indications. But we’ve just begun. Real World Evidence is becoming an important part of every clinical development plan, in the soup-through-nuts approach used in building franchises.

I’ve recruited a panel of 3 top experts in the field — the first in a series of premium webinars — to look at the practical realities governing what can be done today, and where this is headed over the next few years, at the prodding of the FDA.

ZHEN SU — Merck Serono’s Senior Vice President and Global Head of Oncology

ELLIOTT LEVY — Amgen’s Senior Vice President of Global Development

CHRIS BOSHOFF — Pfizer Oncology’s Chief Development Officer

A premium subscription to Endpoints News is required to attend this webinar. Please upgrade to either an Insider or Enterprise plan for access. Already have Endpoints Premium? Please sign-in below. You can contact our Subscriptions team at with any issues.

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As­traZeneca’s Imfinzi/treme com­bo strikes out — again — in lung can­cer. Is it time for last rites?

AstraZeneca bet big on the future of their PD-L1 Imfinzi combined with the experimental CTLA-4 drug tremelimumab. But once again it’s gone down to defeat in a major Phase III study — while adding damage to the theory involving targeting cancer with a high tumor mutational burden.

Early Wednesday the pharma giant announced that their NEPTUNE study had failed, with the combination unable to beat standard chemo at overall survival in high TMB cases of advanced non-small cell lung cancer. We won’t get hard data until later in the year, but the drumbeat of failures will call into question what — if any — future this combination can have left.

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UP­DAT­ED: Pay­back? An­a­lysts say Sarep­ta was blind­sided by an FDA re­jec­tion dri­ven by reg­u­la­to­ry re­venge

In one of the least anticipated moves of the year, the FDA has rejected Sarepta’s application for an accelerated approval of its Duchenne MD drug golodirsen after fretting over safety issues.

In a statement that arrived after the bell on Monday, Sarepta explained the CRL, saying:

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Levi Garraway. Broad Institute via Youtube

Roche raids Eli Lil­ly for its next chief med­ical of­fi­cer as San­dra Horn­ing plans to step down

We found out Monday morning where Levi Garraway was headed after he left Eli Lilly as head of oncology R&D a few days ago. Roche named Garraway as their new chief medical officer, replacing Sandra Horning, who they say is retiring from the company.

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Af­ter a posse of Wall Street an­a­lysts pre­dict a like­ly new win for Sarep­ta, we're down to the wire on a crit­i­cal FDA de­ci­sion

As Bloomberg notes, most of the Wall Street analysts that cover Sarepta $SRPT are an upbeat bunch, ready to cheer on the team when it comes to their Duchenne MD drugs, or offer explanations when an odd setback occurs — as happened recently with a safety signal that was ‘erroneously’ reported last week.

Ritu Baral Cowen
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FDA de­ci­sion on Ver­tex's CF triple will come just ahead of planned CEO shake­up

Vertex has clinched a priority review for the all-important cystic fibrosis triple that will blaze the trail for treating a large group of patients unhelped by its current drugs.

FDA regulators have set a PDUFA date of March 19, 2020, just a year after the Boston biotech posted positive Phase III results showing that people with two F508del mutations experienced statistically significant improvements in lung function after a 4-week regimen of VX-445, tezacaftor and ivacaftor. After reviewing 24-week data among patients with one F508del mutation and one minimal function mutation — and thoroughly comparing the VX-445 triple with another combo featuring VX-659 on scores like safety, drug-drug interactions, and photosensitivity — Vertex ultimately went with VX-445.

An MIT spin­out kills one of its ‘liv­ing ther­a­peu­tics’ af­ter flunk­ing an ear­ly-stage study — shares rout­ed

Just a few weeks after bagging $80 million in a deal to collaborate with Gingko Bioworks on its special blend of engineered bacteria used for “living therapeutics,” little Synlogic in Boston $SYBX is tossing one of its two clinical programs after watching an early-stage study go down in defeat.

Their Phase Ib/IIa study for SYNB1020 to counter the accumulation of ammonia in the body, a condition called hyperammonemia or urea cycle disorder, floundered at the interim readout, forcing the biotech to kill it and reserve its cash for pipeline therapies with greater potential.

Elan­co to buy Bay­er's an­i­mal health busi­ness for $7.6B, as deal­mak­ing gath­ers steam in the sec­tor

Last week, Elanco explicitly dodged answering questions about its rumored interest in Bayer’s animal health business in its post-earnings call. On Tuesday, the Eli Lilly spinoff disclosed it was purchasing the German drug maker’s veterinary unit in a cash-and-stock deal worth $7.6 billion. 

Elanco $ELAN has been busy on the deal-making front. In April, it laid out plans to swallow its partner, Kansas-based pet therapeutics company Aratana $PETX. A July report by Reuters suggested a potential Bayer deal was being explored, and Bloomberg last week said the deal was imminent, citing sources.