Ker­ris­dale’s Sahm Ad­ran­gi leads a bru­tal new biotech short at­tack as tri­al re­sults loom

Ker­ris­dale Cap­i­tal’s Sahm Ad­ran­gi has called a cou­ple of re­cent biotech dis­as­ters in ad­vance. Just two months ago his pre­dic­tion that Bavar­i­an Nordic’s can­cer vac­cine would flunk a long-run­ning study proved ac­cu­rate, and that came right on the heels of Sage’s ug­ly mis­fire on SRSE demon­strat­ing that the drug was no bet­ter than a place­bo in get­ting a re­sponse.

Sahm Ad­ran­gi

Now the in­flu­en­tial hedge fund man­ag­er has got a new biotech in his sights, and this morn­ing he’s pulling the trig­ger on an­oth­er short at­tack, blast­ing the com­pa­ny’s lead drug as an ab­solute fail­ure in the mak­ing.

The biotech is Prothena $PR­TA and the drug is NEOD001, an AL amy­loi­do­sis drug which fig­ures promi­nent­ly in a mar­ket cap that has swelled well past the $2 bil­lion mark.

Ac­cord­ing to Ker­ris­dale an­a­lysts, the Phase I/II study for this drug failed to show any promise. Point­ing to ex­pert — though un­named — fig­ures in the field, the da­ta from the loom­ing Phase IIb and Phase III stud­ies will prove the drug’s worth­less­ness be­yond any doubt.

“It’s clear that this has no chance of suc­cess,” Ad­ran­gi tells me. “Both stud­ies are go­ing to flop.”

Any ex­pec­ta­tions of suc­cess, they add, are built on ran­dom re­spons­es for the NT-proB­NP bio­mark­er that are like­ly to hap­pen at any time in any case.

To be sure, Ker­ris­dale’s mis­sion is clear here — and it’s al­so con­tro­ver­sial in a mar­ket that of­ten sin­gles out shorts for crit­i­cism. Hav­ing pre­dict­ed a cat­a­stro­phe in the clin­ic, it’s now bet­ting that Prothena’s shares will tank, and if it does they stand to prof­it enor­mous­ly. But in a field where anony­mous short at­tacks are a dime a dozen, Ker­ris­dale’s Ad­ran­gi goes pub­lic with his gam­bles, and the rea­sons why he’s gone on the of­fen­sive. They rep­re­sent the po­lar op­po­site of the sell-side notes, which of­ten gain wide­spread at­ten­tion for rosy sce­nar­ios.

Prothena’s shares dropped 8% on the re­port this morn­ing.

I’ve queried Prothena ex­ecs for a re­sponse as Ker­ris­dale’s re­port hit Wednes­day morn­ing.

Ker­ris­dale’s short re­ports — they al­so go long on oc­ca­sion — are typ­i­cal­ly harsh and Prothena is no ex­cep­tion. Some key points:

  • “Prothena’s “best re­sponse” is an un­in­for­ma­tive mea­sure that sub­sti­tutes vari­ance for ef­fi­ca­cy, and Prothena pro­vides this in lieu of mean­ing­ful da­ta be­cause NEOD001 does not work.” The re­port cites one pa­tient who had to drop out of the study af­ter a dan­ger­ous de­vel­op­ment, but was still count­ed as a suc­cess. And Ker­ris­dale ac­cus­es Prothena of hid­ing bad da­ta.
  • “Prothena’s car­diac best re­sponse rate is mere­ly a byprod­uct of well-doc­u­ment­ed nat­ur­al vari­ance, and we be­lieve there is no chance of NEOD001 pro­duc­ing sta­tis­ti­cal­ly sig­nif­i­cant re­sults in its cur­rent Phase 2b and Phase 3 tri­als.”
  • There was no dose re­sponse rate tracked and no way the drug can beat the re­spons­es seen in a con­trol arm.
  • The sci­ence is bad. “The pro­teins and amy­loid struc­tures vary be­tween pa­tients and even among amy­loid de­posits with­in a sin­gle pa­tient far too much for a sin­gle cryp­tic epi­tope to work with any con­sis­ten­cy.”

And they even go af­ter Neil Wood­ford, a backer who has al­so in­vest­ed in North­west Bio­ther­a­peu­tics, now trad­ing as a pen­ny stock.

Prothena re­cent­ly wrote off a pso­ri­a­sis drug af­ter a dis­ap­point­ing Phase Ib, blunt­ly call­ing the da­ta a dis­ap­point­ment. But Ad­ran­gi and his an­a­lyst say they had no choice in the mat­ter, call­ing it im­pos­si­ble to mask.

Ker­ris­dale takes no pris­on­ers dur­ing these at­tacks.

On a glob­al romp, Boehringer BD team picks up its third R&D al­liance for Ju­ly — this time fo­cused on IPF with $50M up­front

Boehringer Ingelheim’s BD team is on a global deal spree. The German pharma company just wrapped its third deal in 3 weeks, going back to Korea for its latest pipeline pact — this time focused on idiopathic pulmonary fibrosis.

They’re handing over $50 million to get their hands on BBT-877, an ATX inhibitor from Korea’s Bridge Biotherapeutics that was on display at a science conference in Dallas recently. There’s not a whole lot of data to evaluate the prospects here. Researchers noted a dose-dependent increase of plasma concentrations of the drug in an interim review of their Phase I, primarily spotlighting safety and tolerability. And Bridge has touted preclinical data they say makes this a best-in-class contender.

Servi­er scoots out of an­oth­er col­lab­o­ra­tion with Macro­Gen­ics, writ­ing off their $40M

Servier is walking out on a partnership with MacroGenics $MGNX — for the second time.

After the market closed on Wednesday MacroGenics put out word that Servier is severing a deal — inked close to 7 years ago — to collaborate on the development of flotetuzumab and other Dual-Affinity Re-Targeting (DART) drugs in its pipeline.

MacroGenics CEO Scott Koenig shrugged off the departure of Servier, which paid $20 million to kick off the alliance and $20 million to option flotetuzumab — putting a heavily back-ended $1 billion-plus in additional biobuck money on the table for the anti-CD123/CD3 bispecific and its companion therapies.

Den­mark's Gen­mab hits the jack­pot with $500M+ US IPO as small­er biotechs rake in a com­bined $147M

Danish drugmaker Genmab A/S is off to the races with perhaps one of the biggest biotech public listings in decades, having reaped over $500 million on the Nasdaq, as it positions itself as a bonafide player in antibody-based cancer therapies.

The company, which has long served as J&J’s $JNJ key partner on the blockbuster multiple myeloma therapy Darzalex, has asserted it has been looking to launch its own proprietary product — one it owns at least half of — by 2025.

FDA over­rides ad­comm opin­ions a fifth of the time, study finds — but why?

For drugmakers, FDA advisory panels are often an apprehended barometer of regulators’ final decisions. While the experts’ endorsement or criticism often translate directly to final outcomes, the FDA sometimes stun observers by diverging from recommendations.

A new paper out of Milbank Quarterly put a number on that trend by analyzing 376 voting meetings and subsequent actions from 2008 through 2015, confirming the general impression that regulators tend to agree with the adcomms most of the time — with discordances in only 22% of the cases.

Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

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Part club, part guide, part land­lord: Arie Bellde­grun is blue­print­ing a string of be­spoke biotech com­plex­es in glob­al boom­towns — start­ing with Boston

The biotech industry is getting a landlord, unlike anything it’s ever known before.

Inspired by his recent experiences scrounging for space in Boston and the Bay Area, master biotech builder, investor, and global dealmaker Arie Belldegrun has organized a new venture to build a new, 250,000 square foot biopharma building in Boston’s Seaport district — home to Vertex and a number of up-and-coming biotech players.

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H1 analy­sis: The high-stakes ta­ble in the biotech deals casi­no is pay­ing out some record-set­ting win­nings

For years the big trend among dealmakers at the major players has been centered on ratcheting down upfront payments in favor of bigger milestones. Better known as biobucks for some. But with the top 15 companies competing for the kind of “transformative” pacts that can whip up some excitement on Wall Street, with some big biotechs like Regeneron now weighing in as well, cash is king at the high stakes table.

We asked Chris Dokomajilar, the head of DealForma, to crunch the numbers for us, looking over the top 20 deals for the past decade and breaking it all down into the top alliances already created in 2019. Gilead has clearly tipped the scales in terms of the coin of the bio-realm, with its record-setting $5 billion upfront to tie up to Galapagos’ entire pipeline.

Dokomajilar notes:

We’re going to need a ‘three comma club’ for the deals with over $1 billion in total upfront cash and equity. The $100 million-plus club is getting crowded at 164 deals in the last decade with new deals being added towards the top of the chart. 2019 already has 14 deals with at least $100 million in upfront cash and equity for a total year-to-date of over $9 billion. That beats last year’s $8 billion and sets a record.

Add upfronts and equity payments and you get $11.5 billion for the year, just shy of last year’s record-setting $11.8 billion.

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Novotech CRO Ex­pands Chi­na Team as Biotech De­mand for Clin­i­cal Tri­als In­creas­es up to 79%

An increase in demand of up to 79% for clinical trials in China has prompted Novotech the Asia-Pacific CRO to rapidly expand the China team, appointing expert local clinical executives to their Shanghai and Hong Kong offices. The company is planning to expand their team by 30% over the next quarter.

Novotech China has seen considerable demand recently which is borne out by research from GlobalData:
A global migration of clinical research is occurring from high-income countries to low and middle-income countries with emerging economies. Over the period 2017 to 2018, for example, the number of clinical trial sites opened by biotech companies in Asia-Pacific increased by 35% compared to 8% in the rest of the world, with growth as high as 79% in China.
Novotech CEO Dr John Moller said China offers the largest population in the world, rapid economic growth, and an increasing willingness by government to invest in research and development.
Novotech’s 23 years of experience working in the region means we are the ideal CRO partner for USA biotechs wanting to tap the research expertise and opportunities that China offers.
There are over 22,000 active investigators in Greater China, with about 5,000 investigators with experience on at least 3 studies (source GlobalData).

UP­DAT­ED: With loom­ing ‘apoc­a­lypse of drug re­sis­tance,’ Mer­ck’s com­bi­na­tion an­tibi­ot­ic scores FDA ap­proval on two fronts

Merck — one of the last large biopharmaceuticals companies in the beleaguered field of antibiotic drug development — on Wednesday said the FDA had sanctioned the approval of its combination antibacterial for the treatment of complicated urinary tract and intra-abdominal infections.

To curb the rise of drug-resistant bacteria and maintain the efficacy of the therapy, Recarbrio (and other antibacterials) — the drug must be used to treat or prevent infections that are proven or strongly suspected to be caused by susceptible gram-negative bacteria, Merck $MRK said.

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