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

ZS Per­spec­tive: 3 Pre­dic­tions on the Fu­ture of Cell & Gene Ther­a­pies

The field of cell and gene therapies (C&GTs) has seen a renaissance, with first generation commercial therapies such as Kymriah, Yescarta, and Luxturna laying the groundwork for an incoming wave of potentially transformative C&GTs that aim to address diverse disease areas. With this renaissance comes several potential opportunities, of which we discuss three predictions below.

Allogenic Natural Killer (NK) Cells have the potential to displace current Cell Therapies in oncology if proven durable.

Despite being early in development, Allogenic NKs are proving to be an attractive new treatment paradigm in oncology. The question of durability of response with allogenic therapies is still an unknown. Fate Therapeutics’ recent phase 1 data for FT516 showed relatively quicker relapses vs already approved autologous CAR-Ts. However, other manufacturers, like Allogene for their allogenic CAR-T therapy ALLO-501A, are exploring novel lymphodepletion approaches to improve persistence of allogenic cells. Nevertheless, allogenic NKs demonstrate a strong value proposition relative to their T cell counterparts due to comparable response rates (so far) combined with the added advantage of a significantly safer AE profile. Specifically, little to no risk of graft versus host disease (GvHD), cytotoxic release syndrome (CRS), and neurotoxicity (NT) have been seen so far with allogenic NK cells (Fig. 1). In addition, being able to harness an allogenic cell source gives way to operational advantages as “off-the-shelf” products provide improved turnaround time (TAT), scalability, and potentially reduced cost. NKs are currently in development for a variety of overlapping hematological indications with chimeric antigen receptor T cells (CAR-Ts) today, and the question remains to what extent they will disrupt the current cell therapy landscape. Click for more details.

Graphic: Kathy Wong for Endpoints News

What kind of biotech start­up wins a $3B syn­di­cate, woos a gallery of mar­quee sci­en­tists and re­cruits GSK's Hal Bar­ron as CEO in a stun­ner? Let Rick Klaus­ner ex­plain

It started with a question about a lifetime’s dream on a walk with tech investor Yuri Milner.

At the beginning of the great pandemic, former NCI chief and inveterate biotech entrepreneur Rick Klausner and the Facebook billionaire would traipse Los Altos Hills in Silicon Valley Saturday mornings and talk about ideas.

Milner’s question on one of those mornings on foot: “What do you want to do?”

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Executive Director of the EMA Emer Cooke (AP Photo/Geert Vanden Wijngaert)

Eu­ro­pean Par­lia­ment signs off on strength­en­ing drug reg­u­la­tor's abil­i­ty to tack­le short­ages

The European Parliament on Thursday endorsed a plan to increase the powers of the European Medicines Agency, which will be better equipped to monitor and mitigate shortages of drugs and medical devices.

By a vote of 655 to 31, parliament signed off on a provisional agreement reached with the European Council from last October, in which the EMA will create two shortage steering groups (one for drugs, the other for devices), a new European Shortages Monitoring Platform to facilitate data collection and increase transparency, and on funding for the work of the steering groups, task force, working parties and expert panels that are to be established.

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Sec­ondary patents prove to be key in biosim­i­lar block­ing strate­gies, re­searchers find

While the US biosimilars industry has generally been a disappointment since its inception, with FDA approving 33 biosimilars since 2015, just a fraction of those have immediately followed their approvals with launches. And more than a handful of biosimilars for two of the biggest blockbusters of all time — AbbVie’s Humira and Amgen’s Enbrel — remain approved by FDA but still have not launched because of legal settlements.

Hal Barron, Endpoints UKBIO20 (Jeff Rumans)

'Al­tos was re­al­ly a once-in-a-life­time op­por­tu­ni­ty': Hal Bar­ron re­flects on his big move

By all accounts, Hal Barron had one of the best jobs in Big Pharma R&D. He made more than $11 million in 2020, once again reaping more than his boss, Emma Walmsley, who always championed him at every opportunity. And he oversaw a global R&D effort that struck a variety of big-dollar deals for oncology, neurodegeneration and more.

Sure, the critics never let up about what they saw as a rather uninspiring late-stage pipeline, where the rubber hits the road in the Big Pharma world’s hunt for the next big near-term blockbuster, but the in-house reviews were stellar. And Barron was firmly focused on bringing up the success rate in clinical trials, holding out for the big rewards of moving the dial from an average 10% success rate to 20%.

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FDA+ roundup: FDA's neu­ro­science deputy de­parts amid on­go­ing Aduhelm in­ves­ti­ga­tions; Califf on the ropes?

Amid increased scrutiny into the close ties between FDA and Biogen prior to the controversial accelerated approval of Aduhelm, the deputy director of the FDA’s office of neuroscience has called it quits after more than two decades at the agency.

Eric Bastings will now take over as VP of development strategy at Ionis Pharmaceuticals, the company said Wednesday, where he will provide senior clinical and regulatory leadership in support of Ionis’ pipeline.

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Hal Barron (GSK via YouTube)

GSK R&D chief Hal Bar­ron jumps ship to run a $3B biotech start­up, Tony Wood tapped to re­place him

In a stunning switch, GlaxoSmithKline put out word early Wednesday that R&D chief Hal Barron is exiting the company after 4 years — a relatively brief run for the man chosen by CEO Emma Walmsley in late 2017 to turn around the slow-footed pharma giant.

Barron is being replaced by Tony Wood, a close associate of Barron’s who’s taking one of the top jobs in Big Pharma R&D. He’ll be closer to home, though, for GSK. Barron has been running a UK and Philadelphia-based research organization from his perch in San Francisco.

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Kenneth Galbraith, incoming Zymeworks CEO

Zymeworks re­places half its C-suite, aims to lay off 25% of to­tal work­force as new CEO takes over

New Zymeworks CEO Kenneth Galbraith is aiming to hit the ground running when his tenure officially begins next month, but he’ll be doing so with a much different looking team.

In a lengthy press release outlining the biotech’s 2022 goals, Galbraith said Zymeworks will be laying off at least 25% of its staff over the course of the year. Half of its C-suite will also be replaced immediately as Galbraith looks to remake the company in his image after Ali Tehrani, Zymeworks’ founder and CEO since 2003, stepped down two weeks ago.

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Troy Wilson, Kura CEO

FDA lifts par­tial hold on Ku­ra's Phase Ib AML pro­gram as biotech re­dou­bles mit­i­ga­tion ef­forts

Kura Oncology is clear to resume studies for its early-stage leukemia program after the FDA lifted a clinical hold Thursday afternoon.

Regulators had placed the hold on a Phase Ib study of KO-539, an experimental oral treatment for some genetic subsets of acute myeloid leukemia last November after a patient died while taking the drug. Kura expects to begin enrolling patients again imminently, CEO Troy Wilson told Endpoints News.