Scathing short at­tack from an ob­scure source ac­cus­es Nan­jing Leg­end of ma­nip­u­lat­ing CAR-T da­ta — Gen­script shares nose­dive

Gen­script, the Chi­nese com­pa­ny be­hind overnight CAR-T star Nan­jing Leg­end Biotech, has seen its stock nose­dive af­ter a damn­ing short re­port ques­tioned its da­ta in­tegri­ty, R&D ex­per­tise, safe­ty record and man­u­fac­tur­ing ca­pa­bil­i­ty.

The stock dipped as much as 47% on the Hong Kong Stock Ex­change be­fore trad­ing was sus­pend­ed at around a 26% loss — or $1 bil­lion.

While Gen­script has yet to is­sue an of­fi­cial re­sponse, the com­pa­ny told Na­tion­al Busi­ness Dai­ly that the short re­port “con­tains mul­ti­ple flaws that are in­ac­cu­rate, and the com­pa­ny will pub­lish a clar­i­fi­ca­tion state­ment as soon as pos­si­ble.”

Xi­ao­hu (Frank) Fan

Once a vir­tu­al un­known con­tract re­search or­ga­ni­za­tion, Gen­script came in­to the glob­al spot­light when its sub­sidiary Leg­end pre­sent­ed some jaw-drop­ping re­sults for its BC­MA-tar­get­ing CAR-T at 2017 AS­CO. Then J&J of­fered a high pro­file en­dorse­ment through its Janssen unit by hand­ing $350 mil­lion up­front to part­ner on LCAR-B38M for mul­ti­ple myelo­ma.

But ac­cord­ing to the re­port writ­ten in Chi­nese and at­trib­uted to Flam­ing Re­search — an ob­scure firm whose web­site lists on­ly one re­port on Ti­bet Wa­ter — Leg­end like­ly forged the da­ta, and Janssen missed out on key due dili­gence in haste to catch up with Cel­gene as the two gi­ants fight for dom­i­nance in mul­ti­ple myelo­ma.

Here’s how they got to that con­clu­sion: Leg­end’s CAR-T da­ta came from three “well rec­og­nized hema­tol­ogy hos­pi­tals” in Shang­hai and Jiang­su, and one mediocre hos­pi­tal in Xi’an. But it was the re­searchers in Xi’an who of­fered the most com­pelling da­ta, where­as the da­ta from the oth­er sites didn’t hold up.

“Giv­en that Xi’an da­ta were over­all bet­ter than Shang­hai da­ta, choos­ing to se­lec­tive­ly dis­close Xi’an da­ta is clear­ly fraud­u­lent be­hav­ior,” the re­port reads. “Like­wise, doc­tors in Shang­hai have doubts about the Xi’an da­ta: On one hand Leg­end was more con­cerned with treat­ment ef­fects than safe­ty, on the oth­er the Xi’an hos­pi­tal didn’t have suf­fi­cient record on safe­ty da­ta.”

The in­ci­dent, wide­ly re­port­ed by Chi­nese me­dia, al­so rais­es ques­tions about the volatil­i­ty of the HKEX at a crit­i­cal time as non-rev­enue biotechs start go­ing pub­lic on the ex­change.

Gen­script the CRO was first list­ed in 2015 but got its big break this year in the wake of Leg­end’s stel­lar CAR-T re­sults, surg­ing as much as 500%. Now that its stock is close­ly tied to the per­for­mance of its biotech sub­sidiary, what­ev­er hap­pens here could serve as a cau­tion­ary tale for the pre-rev­enue biotechs that have on­ly re­cent­ly been al­lowed on­to the city’s ex­change.

The 14-page re­port starts with the the­sis that it’s worth less than a quar­ter of its cur­rent price. Aside from is­sues with the da­ta, it high­lights a pa­tient death that oc­curred at a Shang­hai site in 2017, which Gen­script dis­closed but hasn’t fol­lowed up on, as an il­lus­tra­tion of the ther­a­py’s po­ten­tial risk. It fur­ther at­tacks Frank (Xi­ao­hu) Fan, Leg­end’s R&D chief, for his lack of cre­den­tials in drug de­vel­op­ment and the “se­ri­ous chal­lenges” he’s faced in ap­ply­ing for patents — in ad­di­tion to the gen­er­al lack of ex­per­tise in his team.

Qual­i­ty Con­trol in Cell and Gene Ther­a­py – What’s Re­al­ly at Stake?

In early 2021, Bluebird Bio was forced to suspend clinical trials of its gene therapy for sickle cell disease after two patients in the trial developed cancer. As company scientists rushed to assess whether there was any causal link between the therapy and the cancer cases, Bluebird’s stock value plummeted – as did those of multiple other biopharma companies developing similar therapies.

While investigations concluded that the gene therapy was unlikely to have caused cancer, investors and the public may be more skittish regarding the safety of gene and cell therapies after this episode. This recent example highlights how delicate the fields of cell and gene therapy remain today, even as they show great promise.

Chris Gibson (Photo By Vaughn Ridley/Sportsfile for Web Summit via Getty Images)

Re­cur­sion founders gin for­tunes as IPO back­ers show­er $436M on one of the biggest boasts in AI -- based on some very small deals

In the AI drug development world, boasting often comes with the territory. Yet few can rival Recursion when it comes to claiming the lead role in what company execs like to call the industrialization of drug development, with promises of continued exponential growth in the number of drugs it has in the pipeline.

On Friday, the Salt Lake City-based biotech translated its unicorn-sized boasts into a killer IPO, pricing more than 24 million shares at the high end of its range and bringing in $436 million — with a large chunk of that promised by some deep-pocket backers.

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UP­DAT­ED: New Kaiser analy­sis shows how lim­it­ing price ne­go­ti­a­tions to tar­get­ed drugs may bet­ter fo­cus up­com­ing leg­is­la­tion

As Congress considers whether to adopt sweeping new legislation to lower prescription drug prices across the board, the Kaiser Family Foundation is out with a new report on Monday showing how a more targeted approach on a subset of drugs might be a more efficient way to save government funds.

“This analysis shows that Medicare Part D and Part B spending is highly concentrated among a relatively small share of covered drugs, mainly those without generic or biosimilar competitors,” wrote Juliette Cubanski, deputy director of the program on Medicare policy at KFF, and Tricia Neuman, SVP of KFF. “Focusing drug price negotiation or reference pricing on a subset of drugs that account for a disproportionate share of spending would be an efficient use of administrative resources, though it would also leave some potential savings on the table.”

Tillman Gerngross (Adagio)

Till­man Gern­gross' Covid-19 an­ti­body moon­shot scores $336M with the help of new ace CFO. Is an IPO next?

Less than a year into its existence, serial biotech entrepreneur Tillman Gerngross’ antibody play Adagio has raced ahead into a pivotal trial for its lead drug for Covid-19 on the back of some very promising preclinical data. Now, crossover investors led by Peter Kolchinsky at RA are rolling up the Brinks truck — and that could spell an IPO in the offing for Adagio.

Adagio has bagged $336 million as part of a Series C round led by RA Capital to advance lead single-shot antibody ADG20 through a pivotal Phase I/II/III trial for the treatment of mild to moderate Covid-19 patients at high risk of infection, the biotech said Monday.

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When is a drug re­al­ly a de­vice? Court knocks down FDA ap­peal in try­ing to sort that grey area

It’s always a surprise when a court has to step in to tell the FDA that it erred in performing one of its main duties: classifying whether a medical product is drug or a device.

But that’s what the US Court of Appeals for the District of Columbia did on Friday, making clear to the world’s top drug regulator that Genus Medical Technologies’ contrast agent barium sulfate (also known as Vanilla SilQ) should not be considered a drug, as the FDA had said, but a medical device.

Q1: A flood of in­vestor cash drove biotech's num­bers to new record highs, and the tor­rent of cash is mov­ing up­stream fast

If you thought biotech was booming last year, wait until you get a load of the numbers from Q1 2021.

On virtually every level, with one exception, the money engine was working around the clock in the first 3 months of this year. Venture capital has reached such a fever peak that the average B round now weighs in at an average mega-weight value of $100 million. The money flow is also finding its way to the mouth of the R&D river, where discovery work now merits the big bucks instead of cautionary seed funds.

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Jami Rubin (EQRx)

Ja­mi Ru­bin, once fa­bled for grilling bio­phar­ma ex­ecs, de­camps to head fi­nance at drug pric­ing dis­rupter

As Goldman Sachs’ top pharmaceutical analyst, Jami Rubin was known for asking the tough questions. Now, as she takes the lead on EQRx’s mission to rewrite the rules of drug pricing, we’ll see how good her answers are.

Rubin made the jump to biotech on April 5, becoming EQRx’s new CFO, the company said Monday. She’s coming from PJT Partners, where she’s been a partner providing strategic guidance for biotech and pharmaceutical companies for the last couple years. With EQRx’s recent $500 million Series B round in the books, it wouldn’t be a surprise if she was already lining up a public debut.

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Seagen gets Au­gust PDU­FA for Pad­cev ex­pan­sions; Adap­tate pulls in new cash for gam­ma delta T cell an­ti­bod­ies

Seagen is riding the wave of two new priority reviews straight to the FDA.

The Bothell, WA-based biotech and their partners at Astellas announced Monday that two supplemental BLAs for Padcev had been accepted by US regulators. FDA has set Aug. 17 as the PDUFA date for the reviews.

“With our recent regulatory submissions, we intend to provide the highest level of clinical evidence supporting Padcev use — overall survival data from a randomized Phase III trial — and expand availability in multiple countries where there is unmet medical need,” said Astellas oncology chief Andrew Krivoshik.

Ben Carson (Evan Vucci, AP Images)

UP­DAT­ED The doc­tor is in: Trump in­sid­er Ben Car­son joins NASH play­er Galectin as a 'spe­cial con­sul­tant,' part-time spokesman

In the few short months since President Donald Trump left office, his former department heads are reportedly having a difficult time finding employment. But for Ben Carson, Trump’s former housing secretary, that’s not a problem anymore after biotech came calling.

Carson, a former GOP presidential candidate and erstwhile HUD head, has joined Galectin Therapeutics as a “special consultant” the biotech hopes will help raise its profile and provide an entrée to key business partnerships, the company said Monday.