Sahm Ad­ran­gi’s Ker­ris­dale knifes Pro­teosta­sis’ 'break­through' cys­tic fi­bro­sis da­ta in a bru­tal biotech short at­tack

Sahm Ad­ran­gi and his SWAT team at Ker­ris­dale Cap­i­tal have put an­oth­er biotech in their cross hairs.

The high-pro­file biotech in­vestor — who’s tak­en on a group of biotechs that range from Bavar­i­an Nordic to Prothena with a se­ries of bru­tal short at­tacks — is now ready to call Pro­teosta­sis’ $PTI work on cys­tic fi­bro­sis a bomb in the mak­ing.

“We looked at it,” Ad­ran­gi tells me, “and de­cid­ed to take a clos­er look af­ter it spiked” in the wake of the FDA’s break­through drug des­ig­na­tion.

Reg­u­la­tors put the Cam­bridge, MA-based com­pa­ny on its in­side reg­u­la­to­ry track, promis­ing to pro­vide an open-door ap­proach to help­ing speed it along, af­ter the biotech post­ed da­ta for its CFTR am­pli­fi­er PTI-428, part of a cock­tail it’s been de­vel­op­ing in hopes of cap­i­tal­iz­ing on the mar­ket that Ver­tex has been build­ing for it­self.

The biotech re­port­ed Phase II da­ta demon­strat­ing that their drug was linked with a 5.2% jump in a mea­sure of lung per­for­mance.

Shane Wil­son

In Ker­ris­dale’s view, though, that is non­sense. What re­al­ly hap­pened, Ker­ris­dale an­a­lyst Shane Wil­son claims, is that the tiny place­bo arm in­volv­ing just 4 pa­tients in the study had a sharp, sud­den and un­ex­pect­ed drop in lung per­for­mance dur­ing the 28-day tri­al that cre­at­ed a gap fa­vor­ing the drug. And when you com­pare it with what you would ex­pect for these pa­tients, there should not nor­mal­ly have been any­thing like that gulf be­tween the two small arms of the study.

“If place­bo was flat and the drug was up 1%,” says Wil­son, “no one would think that was good.”

From the re­port:

On av­er­age, we cal­cu­late that the PTI-428 group im­proved by just 2.5%, while the (4-per­son) place­bo group wors­ened by 6.7% – ex­act­ly repli­cat­ing Pro­teosta­sis’s stat­ed place­bo-ad­just­ed rel­a­tive im­prove­ment of 9.2%. In terms of ab­solute changes, we es­ti­mate that the PTI-428 group im­proved on av­er­age by just 1 per­cent­age point, while the place­bo group wors­ened by 4 per­cent­age points.

And that’s not some­thing that can be repli­cat­ed in a larg­er tri­al.

The rest of the da­ta points — like sweat chlo­ride — are ei­ther messy or be­ing ig­nored by Pro­teosta­sis, adds the Ker­ris­dale team.

“They don’t give the ac­tu­al re­sults, which means al­most cer­tain­ly that the re­sults aren’t good; prob­a­bly be­cause they didn’t do any­thing.”

From their re­port:

Giv­en the scarci­ty of CFTR mR­NA and pro­tein even in the air­way ep­ithe­li­um, we doubt that Pro­teosta­sis can re­li­ably mea­sure its fa­vored bio­mark­ers, call­ing in­to ques­tion its fun­da­men­tal un­der­stand­ing of its own drug. In­deed, we find it dif­fi­cult to trust the com­pa­ny’s da­ta, giv­en its ten­den­cy to gloss over po­ten­tial­ly neg­a­tive facts. For in­stance, while a group of par­tial­ly in­de­pen­dent re­searchers have re­cent­ly found that, in one in vit­ro mod­el, PTI-428 failed to in­crease CFTR pro­tein lev­els or func­tion­al­i­ty to a sta­tis­ti­cal­ly sig­nif­i­cant de­gree, ei­ther on its own or when added to stan­dard-of- care drugs, Pro­teosta­sis man­age­ment has ig­nored the un­pleas­ant re­sults, even though three Pro­teosta­sis em­ploy­ees were co-au­thors on the pa­per.

With­out a lead drug or a pipeline, Ker­ris­dale says the com­pa­ny can on­ly be worth cash, a 70% to 90% drop in val­ue.

There is lit­tle val­ue in PTI’s mis­lead­ing­ly spun da­ta, bizarrely noisy bio­mark­ers, and se­lec­tive­ly dis­closed re­sults. Alas, it’s far eas­i­er to in­flate weak da­ta than it is to in­flate ail­ing lungs.

The short at­tack ar­rives just hours af­ter Pro­teosta­sis laid out plans to take ad­van­tage of its swelled share price by sell­ing 9 mil­lion shares, with Leerink and RBC Cap­i­tal act­ing as joint book run­ners. Its shares were down 13% in pre-mar­ket trad­ing and then kept slid­ing af­ter the Ker­ris­dale re­port hit. By mid-morn­ing shares were down 20%.

Neil Wood­ford

While quite a few short at­tacks tend to arise from anony­mous re­ports or by way of a Tro­jan horse, Ker­ris­dale likes to do their work pub­licly and up close. They re­cent­ly earned some con­sid­er­able crit­i­cism from in­vestor Neil Wood­ford, who said:

Their job is to scare the mar­ket when the mar­ket is pre­pared to be scared. It doesn’t mat­ter if what they said about Al­lied Minds and Prothena is to­tal­ly in­ac­cu­rate and un­sub­stan­ti­at­ed. What mat­ters is Bloomberg and oth­ers giv­ing them the oxy­gen of pub­lic­i­ty and hey presto there is a self-ful­filled prophe­cy and the share price falls.

Prothena’s da­ta are com­ing up in the sec­ond quar­ter.


Sahm Ad­ran­gi. KER­RIS­DALE CAP­I­TAL

In his­toric Covid-19 ad­comm, vac­cine ex­perts de­bate a sea of ques­tions — but of­fer no clear an­swers

The most widely anticipated and perhaps most widely watched meeting in the FDA’s 113-year history ended late Thursday night with a score of questions and very few answers.

For nearly 9 hours, 18 different outside experts listened to public health agencies and foundations present how the United States’ Covid-19 vaccine program developed through October, and they debated where it should go from there: Were companies testing the right metrics in their massive trials? How long should they track patients before declaring a vaccine safe or effective? Should a vaccine, once authorized, be given to the volunteers in the placebo arm of a trial?

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Dan O'Day, Gilead CEO (Andrew Harnik, AP Images)

UP­DAT­ED: FDA anoints Gilead­'s remde­sivir as the Covid-19 treat­ment win­ner, hand­ing down full ap­proval — de­spite some deep skep­ti­cism

Seven months into the Covid-19 pandemic, the race to develop a treatment for the disease that’s proved to be the biggest health crisis in a century has an officially designated winner: Gilead. And they’re picking up the prize — worth billions in peak sales — despite a major study that concluded the drug was no help in reducing the number of people who die from the virus.

The FDA handed down a thumbs-up for remdesivir, the company announced Thursday afternoon, as the drug becomes the first fully approved treatment for Covid-19 in the US. Remdesivir, to be marketed as Veklury, will come with a label for treatment in adults and children older than 12 in Covid-19 cases that require hospitalization.

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Pascal Soriot, AstraZeneca CEO (Zach Gibson/Bloomberg via Getty Images)

UP­DAT­ED: FDA gives As­traZeneca the thumbs-up to restart PhI­II Covid-19 vac­cine tri­als, and J&J is prepar­ing to re­sume its study

Several countries had restarted their portions of AstraZeneca’s global Phase III Covid-19 vaccine trial after the study was paused worldwide in early September, but the US notably stayed on the sidelines — until now. Friday afternoon the pharma giant announced the all clear from US regulators. And on top of that, J&J announced Friday evening that it’s preparing to resume its own Phase III vaccine trial.

Ul­tragenyx in­jects $40M to grab Solid's mi­crody­s­trophin trans­gene — while side­step­ping the AAV9 vec­tor that stirred up safe­ty fears

Since before Ilan Ganot started Solid Bio to develop a gene therapy for kids like his son, who has Duchenne muscular dystrophy, Ultragenyx CEO Emil Kakkis has been watching and advising the former investment banker as he navigated the deep waters of drug development.

Just as Solid is getting back up on its feet after a yearlong clinical hold, Kakkis has decided to jump in for a formal alliance.

With a $40 million upfront, Ultragenyx is grabbing 14.45% of Solid’s shares $SLDB and the rights to its microdystrophin construct for use in combination with AAV8 vectors. Solid’s lead program, which utilizes AAV9, remains unaffected. The company also retains rights to other applications of its transgene.

A top drug pro­gram at Bay­er clears a high bar for CKD — open­ing the door to an FDA pitch

Over the past 4 years, Bayer has been steering a major trial through a pivotal program to see if their drug finerenone could slow down the pace of chronic kidney disease in patients suffering from both CKD as well as Type 2 diabetes.

Today, their team jumped on a virtual meeting hosted by the American Society of Nephrology to offer a solid set of pivotal data to demonstrate that the drug can delay dialysis or a kidney replacement as well as cardio disease, while also adding some worrying signs of hyperkalemia among the patients taking the drug. And they’re hustling it straight to regulators in search of an approval for kidney disease and cardio patients — one of the toughest challenges in the book, as demonstrated by repeated past failures.

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Michel Vounatsos, Biogen CEO (via YouTube)

UP­DAT­ED: Bio­gen spot­lights a pair of painful pipeline set­backs as ad­u­canum­ab show­down looms at the FDA

Biogen has flagged a pair of setbacks in the pipeline, spotlighting the final failure for a one-time top MS prospect while scrapping a gene therapy for SMA after the IND was put on hold due to toxicity.

Both failures will raise the stakes even higher on aducanumab, the Alzheimer’s drug that Biogen is betting the ranch on, determined to pursue an FDA OK despite significant skepticism they can make it with mixed results and a reliance on post hoc data mining. And the failures are being reported as Biogen was forced to cut its profit forecast for 2020 as a generic rival started to erode their big franchise drug.

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Adam Koppel and Jeffrey Schwartz, Bain

Bain ex­ecs Adam Kop­pel and Jef­frey Schwartz line up $125M for their first blank check deal as Wall Street con­tin­ues to em­brace biotech

Adam Koppel and Jeffrey Schwartz have jumped into the blank check game, raising $125 million for a stock listing in search of a company.

Their SPAC, BCLS Acquisition Corp, raised $125 million this week, with a line on $25 million more as it scouts for a biotech in search of money and a place on Wall Street.

The two principals at Bain Life Sciences have been on a romp since they set up the Bain operation 4 years ago. Their S-1 spells out a track record of 22 deals totaling $650 million for the life sciences group, which led to 9 IPOs.

Covid-19 roundup: An mR­NA play­er gets a boost out of the lat­est round of an­i­mal da­ta; Phase­Bio pulls the plug on treat­ment tri­al

The big tell for CureVac $CVAC is coming up with a looming early-stage readout on their mRNA Covid-19 vaccine in the clinic. But for now they’ll make do with an upbeat assessment on the preclinical animal data they used to get into the clinic.

Researchers for the German biotech say they got the high antibody titers and T cell activation they were looking for, lining up a hamster challenge to demonstrate — in a simple model — that the vaccine could protect the furry creatures. Like the other mRNA vaccines, the drug sends instructions to spur cells to decorate themselves with the distinctive spike on the virus to elicit an immune response.

UP­DAT­ED: In­di­v­ior's Shaun Thax­ter heads to prison, join­ing In­sys' John Kapoor among jailed opi­oid ex­ecs

Update: An earlier version of this article misidentified the jailed Insys CEO. Former CEO John Kapoor was sentenced to 5.5 years in prison in January. Endpoints News regrets the error.

The Justice Department’s years-long battle with Indivior has arrived at a rare place: the jailing of a pharmaceutical executive.

A US district court sentenced long-running Indivior CEO Shaun Thaxter to 6 months in federal prison for his role in company efforts to mislead a major healthcare provider about the safety and abusability of their opioid addiction drug Suboxone, which generated billions in revenue over the last decade. Thaxter joins former Insys CEO John Kapoor as one of the only two executives to face prison time for their roles in the opioid epidemic.