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

Once fu­ri­ous over No­var­tis’ da­ta ma­nip­u­la­tion scan­dal, the FDA now says it’s noth­ing they need to take ac­tion on

Back in the BP era — Before Pandemic — the FDA ripped Novartis for its decision to keep the agency in the dark about manipulated data used in its application for Zolgensma while its marketing application for the gene therapy was under review.

Civil and criminal sanctions were being discussed, the agency noted in a rare broadside at one of the world’s largest pharma companies. Notable lawmakers cheered the angry regulators on, urging the FDA to make an example of Novartis, which fielded Zolgensma at $2.1 million — the current record for a one-off therapy.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 77,000+ biopharma pros reading Endpoints daily — and it's free.

Covid-19 roundup: GSK, Am­gen tai­lor R&D work to fit the coro­n­avirus age; Doud­na's ge­nomics crew launch­es di­ag­nos­tic lab

You can add Amgen and GSK to the list of deep-pocket drug R&D players who are tailoring their pipeline work to fit a new age of coronavirus.

Following in the footsteps of a lineup of big players like Eli Lilly — which has suspended patient recruitment for drug studies — Amgen and GSK have opted to take a more tailored approach. Amgen is intent on circling the wagons around key studies that are already fully enrolled, and GSK has the red light on new studies while the pandemic plays out.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 77,000+ biopharma pros reading Endpoints daily — and it's free.

In a stun­ning set­back, Amarin los­es big patent fight over Vas­cepa IP. And its high-fly­ing stock crash­es to earth

Amarin’s shares $AMRN were blitzed Monday evening, losing billions in value as reports spread that the company had lost its high-profile effort to keep its Vascepa patents protected from generic drugmakers.

Amarin had been fighting to keep key patents under lock and key — and away from generic rivals — for another 10 years, but District Court Judge Miranda Du in Las Vegas ruled against the biotech. She ruled that:
(A)ll the Asserted Claims are invalid as obvious under 35 U.S.C.§ 103. Thus, the Court finds in favor of Defendants on Plaintiff’s remaining infringementclaim, and in their favor on their counterclaims asserting the invalidity of the AssertedClaims under 35 U.S.C. § 103.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 77,000+ biopharma pros reading Endpoints daily — and it's free.

Covid-19 roundup: J&J, BAR­DA set ear­ly 2021 fin­ish line for $1B vac­cine race; FDA al­lows emer­gency drug use, ahead of piv­otal da­ta

J&J has zeroed in on a Covid-19 vaccine candidate that it hopes to begin testing in humans by September this year — with the extraordinary goal of getting it ready for emergency use in early 2021. And together with BARDA, it’s committing $1 billion to make it happen.

That kind of accelerated timeline would fall on the fast side of NIAID director Anthony Fauci’s well-publicized prediction that it would be another 12 to 18 months before a vaccine can be available for public use. A Phase I trial of Moderna’s mRNA vaccine began two weeks ago, and both the biotech and fellow mRNA player CureVac have discussed similar, if not even faster, timelines for emergency use among healthcare workers.

Mene Pangalos via YouTube

As­traZeneca says its block­buster Farx­i­ga proved to be a game-chang­er in CKD — wrap­ping PhI­II ear­ly

If the FDA can still hold up its end of the bargain, AstraZeneca is already on a short path to scooping up a cutting-edge win with a likely approval for their SGLT2 drug Farxiga in cutting the risk of heart failure. Now the pharma giant says it can point to solid evidence that the drug — initially restricted to diabetes — also works for chronic kidney disease, potentially adding a blockbuster indication for the franchise.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 77,000+ biopharma pros reading Endpoints daily — and it's free.

It is 'kind of a proven tech­nol­o­gy': Hep B vac­cine mak­er joins glob­al hunt for coro­n­avirus vac­cine

Using lab-grown proteins that are engineered to mimic the architecture of viruses to induce an immune response, VBI Vaccines is joining the hunt for a coronavirus vaccine — harnessing technology that has initially been proved safe in early trials as a prophylactic for cytomegalovirus (CMV) infection.

Unlike the raft of the companies in the Covid-19 vaccine race — including Moderna, CureVac and J&J — VBI is taking a pan-coronavirus approach, by developing a vaccine that will encompass Covid-19, severe acute respiratory syndrome (SARS), and Middle East respiratory syndrome (MERS).

Can a pair of top AveX­is alum­ni steer a new gene ther­a­py up­start to R&D glo­ry? 3 VCs bet $60M on it

VCs love few things more than a proven executive team when it comes to launching a new company. And now a group of A-listers has turned to a pair of top execs out of AveXis to steer the latest gene therapy player into the clinic.

The biotech is Waltham, MA-based Affinia and the two execs are Sean Nolan and Rick Modi — the former CEO and CBO respectively of AveXis, the gene therapy pioneer that fetched $8.7 billion in a sale to Novartis. Nolan has now taken the chairman’s role at Affinia while Modi moves up to the CEO post at the company.

Un­de­terred by a pan­dem­ic, Gilde Health­care rais­es their largest fund yet

When Pieter van der Meer started raising the capital for Gilde Healthcare’s fifth fund in the waning months of 2019, he had his eyes on a different chain of events that could change the healthcare system and perhaps even play to his firm’s advantage: The US presidential election.

Since raising their third fund in 2011, the 34-year-old Dutch firm had focused on value-based care. They chose late-stage biotechs that came up with new devices and delivery systems for de-risked established compounds, and when they chose preclinical biotechs, they spoke with potential pharma partners, payers and regulators to ask where and at what prices the drug made sense. As the Democratic primary became a contest over how to lower healthcare costs, it looked like a strategy that could pay off.

Daniel O'Day (AP Images)

Gilead CEO Dan O'­Day of­fers a de­tailed ex­pla­na­tion on remde­sivir ac­cess — re­as­sur­ing an­a­lysts that Covid-19 da­ta are com­ing fast

After coming under heavy fire from consumer groups ready to pummel them for grabbing the FDA’s orphan status for remdesivir — reserved to encourage the development of rare disease therapies — Gilead CEO Daniel O’Day had some explaining to do about the company’s approach to providing access to this drug to patients suffering from Covid-19. And he set aside time over the weekend to patiently explain how they are making their potential pandemic drug available in a new program — one he feels can better be used to address a growing pack of infected patients desperately seeking remdesivir under compassionate use provisions.

In addition to trying to reassure patients that they will once again have an avenue to pursue access, O’Day also reassured some analysts who had been fretting that China’s quick comeback from the coronavirus outbreak could derail its ultra-fast schedule for testing the drug in patients. The data are still expected in a few weeks, he says in the letter, putting the readout in April.

O’Day emphasizes that Gilead intends to pursue a pricing approach that will make this drug widely available — if it proves effective and safe. But no one is quite sure just what the longterm value would be, given the work being done on a variety of vaccines that may be rolled out as early as this fall — at least to the most heavily threatened groups.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 77,000+ biopharma pros reading Endpoints daily — and it's free.