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.

A New Fron­tier: The In­ner Ear

What happens when a successful biotech venture capitalist is unexpectedly diagnosed with a chronic, life-disrupting vertigo disorder? Innovation in neurotology.

That venture capitalist was Jay Lichter, Ph.D., and after learning there was no FDA-approved drug treatment for his condition, Ménière’s disease, he decided to create a company to bring drug development to neurotology. Otonomy was founded in 2008 and is dedicated to finding new drug treatments for the hugely underserved community living with balance and hearing disorders. Helping patients like Jay has been the driving force behind Otonomy, a company heading into a transformative 2020 with three clinical trial readouts: Phase 3 in Ménière’s disease, Phase 2 in tinnitus, and Phase 1/2 in hearing loss. These catalysts, together with others in the field, highlight the emerging opportunity in neurotology.
Otonomy is leading the way in neurotology
Neurotology, or the treatment of inner ear neurological disorders, is a large and untapped market for drug developers: one in eight individuals in the U.S. have moderate-to-severe hearing loss, tinnitus or vertigo disorders such as Ménière’s disease.1 With no FDA-approved drug treatments available for these conditions, the burden on patients—including social anxiety, lower quality of life, reduced work productivity, and higher rates of depression—can be significant.2, 3, 4

Joe Jimenez, Getty

Ex-No­var­tis CEO Joe Jimenez is tak­ing an­oth­er crack at open­ing a new chap­ter in his ca­reer — and that in­cludes a new board seat and a $250M start­up

Joe Jimenez is back.

The ex-CEO of Novartis has taken a board seat on Century Therapeutics, the Versant and Bayer-backed startup focused on coming up with a brand new twist on cell therapies for cancer — a field where Jimenez made his mark backing the first personalized CAR-T approved for use.

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Can we make the an­tibi­ot­ic mar­ket great again?

The standard for-profit model in drug development is straightforward. Spend millions, even billions, to develop a medicine from scratch. The return on investment (and ideally a tidy profit) comes via volume and/or price, depending on the disease. But the string of big pharma exits and slew of biotech bankruptcies indicate that the model is sorely flawed when it comes to antibiotics.

The industry players contributing to the arsenal of antimicrobials are fast dwindling, and the pipeline for new antibiotics is embarrassingly sparse, the WHO has warned. Drugmakers are enticed by greener pastures, compared to the long, arduous and expensive path to antibiotic approval that offers little financial gain as treatments are typically priced cheaply, and often lose potency over time as microbes grow resistant to them.

Top Har­vard chemist caught up in FBI’s 'T­hou­sand Tal­ents' drag­net, ac­cused of ly­ing about Chi­nese con­nec­tions, pay

The FBI’s probe into the alleged theft of R&D secrets by Chinese authorities has drawn Harvard’s top chemist into its net.

The agency accused Charles M. Lieber, who chairs the university’s chemistry and chemical biology department, with lying about his involvement in China’s Thousand Talents campaign, which was established as a way of drawing in innovators from around the world. And the scientist, 60, was charged with making false statements about his ties to China.

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Eye­ing a trio of tri­al ini­ti­a­tions, Jim Wilson's gene ther­a­py start­up woos Bruce Gold­smith from Deer­field as CEO

Passage Bio — Jim Wilson’s self-described “legacy company” — has wooed a seasoned biotech executive to steer the clinical entry of its first three gene therapy programs.

Bruce Goldsmith jumps to the helm of Passage after a brief CEO stint at Civetta, a cancer-focused startup he helped launch while a venture partner at Deerfield. He takes over from OrbiMed partner and interim chief Stephen Squinto, who will now lead the R&D team.

The FTC and New York state ac­cuse Mar­tin Shkre­li of run­ning a drug mo­nop­oly. They plan to squash it — and per­ma­nent­ly ex­ile him

Pharma bro Martin Shkreli was jailed, publicly pilloried and forced to confront some lawmakers in Washington riled by his move to take an old generic and move the price from $17.50 per pill to $750. But through 4 years of controversy and public revulsion, his company never backed away from the price — left uncontrolled by a laissez faire federal policy on a drug’s cost.

Now the FTC and the state of New York plan to pry his fingers off the drug once and for all and open it up to some cheap competition. And their lawsuit is asking that Shkreli — with several years left on his prison sentence — be banned permanently from the pharma industry.

UP­DAT­ED: Ac­celeron res­ur­rects block­buster hopes for so­tater­cept with pos­i­tive PhII — and shares rock­et up

Acceleron $XLRN says that its first major trial readout of 2020 is a success.

In a Phase II study of 106 patients with pulmonary arterial hypertension (PAH), Acceleron’s experimental drug sotatercept hit its primary endpoint: a significant reduction in pulmonary vascular resistance. The drug also met three different secondary endpoints, including the 6-minute walking test.

“We’re thrilled to report such positive topline results from the PULSAR trial,” Acceleron CEO Habib Dable said in a statement. The company said in a conference call they plan on discussing a Phase III trial design with regulators.

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Short at­tack­er Sahm Ad­ran­gi draws crosshairs over a fa­vorite of Sanofi’s new CEO — with PhII da­ta loom­ing

Sahm Adrang Kerrisdale

Kerrisdale chief Sahm Adrangi took a lengthy break from his series of biotech short attacks after his chief analyst in the field pulled up stakes and went solo. But he’s making a return to drug development this morning, drawing crosshairs over a company that’s one of new Sanofi CEO Paul Hudson’s favorite collaborators.

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Amber Saltzman (Ohana)

Flag­ship's first ven­ture of 2020 is out, and it's all about sperm

A couple years ago, Amber Salzman got a call as she was returning East full-time after a two-year stint running a gene therapy company in California.

It was from someone at Flagship Pioneering, the deep-pocketed biotech venture firm. They had a new company with a new way of thinking about sperm. It had been incubating for over a year, and now they wanted her to run it.

“It exactly fit,” Salzman told Endpoints News. “I just thought I had to do something.”