Short sell­er Cit­ron draws fresh blood go­ing af­ter an­oth­er biotech scalp — but can it still cut that deep?

Bioreg­num Opin­ion Col­umn by John Car­roll

Over the past 3 years, since Cit­ron’s An­drew Left made a name for him­self as the cru­sad­ing an­a­lyst who helped take down Valeant with an ex­posé on its shady ties to the spe­cial­ty phar­ma Phili­dor, he and the firm have tack­led a se­ries of big play­ers — with a sure­fire ap­proach to carv­ing up the stock price.

The Valeant take­down be­came a mod­el for biotech short at­tacks. And Cit­ron found plen­ty of lever­age as it went af­ter some much big­ger game.

— Ab­b­Vie $AB­BV, Cit­ron as­sert­ed in a tweet, was marked for share price de­struc­tion af­ter Scott Got­tlieb at­tacked phar­ma strate­gies used to stymie biosim­i­lars. Sure­ly that had to be bad news for the gi­ant Hu­mi­ra fran­chise.

— Ex­press Scripts $ES­RX — the “Phili­dor of the phar­ma in­dus­try” — would be ripped apart by Don­ald Trump’s at­tack on high drug prices.

— Mallinck­rodt $MKD was guilty of price goug­ing on Ac­thar, watch out be­low as the con­tro­ver­sy wreaks hav­oc, said Cit­ron.

In every case, in­vestors re­act­ed to the in­flam­ma­to­ry Twit­ter cam­paign from the mas­ter of may­hem by dump­ing shares, with a quick dive in the stock price. But the com­pa­nies shook off the short at­tacks, with lit­tle of the longterm fall­out that forced Valeant to re­vamp the busi­ness. Cit­ron’s blade drew blood, but the wounds weren’t deep enough to leave much of a scar.

On Wednes­day, Cit­ron went af­ter an­oth­er scalp, this time be­long­ing to Lig­and Phar­ma­ceu­ti­cals $LGND. And once again the Cit­ron ef­fect — touch­ing on that old Valeant mag­ic — was in­stan­ta­neous, with the stock tak­ing a 16% hit af­ter be­ing shoved in­to the bright spot­light.

So what’s in the lat­est Cit­ron at­tack, which ac­cus­es Lig­and ex­ecs of ly­ing about their pro­ject­ed up­side?

Large­ly, they are slic­ing and dic­ing Lig­and’s busi­ness strat­e­gy — de­pend­ing heav­i­ly on promised drug roy­al­ties from part­ners — and the com­pa­nies they do busi­ness with, ques­tion­ing whether much or any of the mile­stone rev­enues Lig­and touts to in­vestors will ever ma­te­ri­al­ize.

Why is man­age­ment sell­ing Viking stock rather than buy­ing it, if they thought the com­pa­ny was so great? Ver­nalis just took a hit on a failed Phase II study. There was a blast against Roivant’s Meta­vant, which li­censed RVT-1502 from Lig­and. Sure­ly, says Cit­ron, the num­bers pro­ject­ed by Lig­and have to be in­flat­ed. The core busi­ness is on­ly worth $20 a share. And so on.

Their con­clu­sion:

It is time for Lig­and Man­age­ment to dis­close to Wall St the at­tri­bu­tion of your pipeline/mile­stone pay­ments from spe­cif­ic com­pa­nies and in­crease your dis­clo­sures about the true vi­a­bil­i­ty of the pipeline. Once in­vestors see that they do not own a phar­ma ETF but rather a col­lec­tions of the lazy man’s sub par as­sets, Cit­ron ex­pects Lig­and stock to re­flect its true val­ue.

Time will tell whether Lig­and bet wise­ly or wrong. But the lat­est ex­posé from Cit­ron failed to de­liv­er any smok­ing gun like the one they found at Valeant. The stock closed at $110.05 Wednes­day, giv­ing the com­pa­ny a $2.34 bil­lion mar­ket cap. So one way or the oth­er, they have plen­ty of fire­pow­er left to see things through.

Cit­ron’s knife is still plen­ty sharp enough to draw blood. But it may be los­ing some of that old Valeant edge.


Im­age: An­drew Left. CIT­RON

Tar­get­ing a Po­ten­tial Vul­ner­a­bil­i­ty of Cer­tain Can­cers with DNA Dam­age Re­sponse

Every individual’s DNA is unique, and because of this, every patient responds differently to disease and treatment. It is astonishing how four tiny building blocks of our DNA – A, T, C, G – dictate our health, disease, and how we age.

The tricky thing about DNA is that it is constantly exposed to damage by sources such as ultraviolet light, certain chemicals, toxins, and even natural biochemical processes inside our cells.¹ If ignored, DNA damage will accumulate in replicating cells, giving rise to mutations that can lead to premature aging, cancer, and other diseases.

Roivant par­lays a $450M chunk of eq­ui­ty in biotech buy­out, grab­bing a com­pu­ta­tion­al group to dri­ve dis­cov­ery work

New Roivant CEO Matt Gline has crafted an all-equity upfront deal to buy out a Boston-based biotech that has been toiling for several years now at building a supercomputing-based computational platform to design new drugs. And he’s adding it to the Erector set of science operations that are being built up to support their network of biotech subsidiaries with an eye to growing the pipeline in a play to create a new kind of pharma company.

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Fol­low biotechs go­ing pub­lic with the End­points News IPO Track­er

The Endpoints News team is continuing to track IPO filings for 2021, and we’ve designed a new tracker page for the effort.

Check it out here: Biopharma IPOs 2021 from Endpoints News

You’ll be able to find all the biotechs that have filed and priced so far this year, sortable by quarter and listed by newest first. As of the time of publishing on Feb. 25, there have already been 16 biotechs debuting on Nasdaq so far this year, with an additional four having filed their S-1 paperwork.

Mark Mal­lon charts post-Iron­wood course by tak­ing CEO job at NeoGe­nomics; Glax­o­SmithK­line vet Feng Ren joins In­sil­i­co as CSO

Mark Mallon steps aside at Ironwood on March 12 after close to two years at the helm, and he already has a new change of scenery squared away. Beginning April 19, Mallon takes charge as CEO of cancer-focused genetic test maker NeoGenomics out of Fort Myers, FL while his predecessor, Douglas VanOort, is retiring after 12 years as NeoGenomics’ chairman and CEO.

It’s a fresh start for Mallon after what will amount to a tumultuous 23 months as Ironwood’s chief executive. Last year was marked by trial failures that spelled double trouble, leaving the Ironwood cupboard bare: first, a Linzess reformulation for irritable bowel syndrome with diarrhea (IBS-D) in May, and then the drug IW-3718 for persistent acid reflux in September. After IW-3718’s discontinuation, Ironwood chopped its staff by 35%. On Feb. 8, Mallon announced his departure at Ironwood, with president Tom McCourt getting bumped up to interim CEO.

Covid-19 roundup: Mer­ck­'s $356M sup­ply deal on hold as FDA asks for more da­ta; FDA ap­proves Pfiz­er/BioN­Tech vac­cine stor­age at stan­dard freez­er temps

Merck is pushing back plans to supply the US government with a Covid-19 drug after the FDA asked for more data to support an emergency use authorization.

The antibody, MK-7110, had looked promising in a Phase III study conducted by OncoImmune before Merck came along and bought the biotech for $425 million. At the interim analysis, investigators looked at data from 203 patients and concluded that a single dose of the drug cut the risk of death or respiratory failure by more than 50% among severe patients. And those taking the drug had a 60% higher chance of improvement in clinical status compared to placebo.

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Ken Frazier, Merck CEO (Bess Adler/Bloomberg via Getty Images)

UP­DAT­ED: Mer­ck takes a swing at the IL-2 puz­zle­box with a $1.85B play for buzzy Pan­dion and its au­toim­mune hope­fuls

When Roger Perlmutter bid farewell to Merck late last year, the drugmaker perhaps best known now for sales giant Keytruda signaled its intent to take a swing at early-stage novelty with the appointment of discovery head Dean Li. Now, Merck is signing a decent-sized check to bring an IL-2 moonshot into the fold.

Merck will shell out roughly $1.85 billion for Pandion Pharmaceuticals, a biotech hoping to gin up regulatory T cells (Tregs) to treat a range of autoimmune disorders, the drugmaker said Thursday.

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Steve Cutler, Icon CEO (Icon)

In the biggest CRO takeover in years, Icon doles out $12B for PRA Health Sci­ences to fo­cus on de­cen­tral­ized clin­i­cal work

Contract research M&A had a healthy run in recent years before recently petering out. But with the market ripe for a big buyout and the Covid-19 pandemic emphasizing the importance of decentralized trials, Wednesday saw a tectonic shift in the CRO world.

Icon, the Dublin-based CRO, will acquire PRA Health Sciences for $12 billion in a move that will shake up the highest rungs of a fragmented market. The merger would combine the 5th- and 6th-largest CROs by 2020 revenue, according to Icon, and the merger will set the newco up to be the second-largest global CRO behind only IQVIA.

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CEO Fred Aslan (Artiva)

NK cell ther­a­py play­er Arti­va makes some more noise, pulling in $120M Se­ries B less than a month af­ter Mer­ck deal

Not even one month after Big Pharma took notice of Artiva when Merck signed a collaboration worth nearly $2 billion in milestones, the off-the-shelf NK cell biotech already has its next big fundraise.

Artiva returns from the venture well Friday with a $120 million Series B round, money they will use to get their first program into the clinic and to file INDs for another two candidates. The raise marks the latest development in a rapidly expanding footprint for Artiva, which, in addition to the Merck deal last month, has now raised almost $200 million since its Series A last June.

Fatty liver conceptual image, 3D illustration showing fatty liver silhouette made from micrograph of liver steatosis (Shutterstock)

The path to NASH: un­der­stand­ing the role of se­vere obe­si­ty in a com­plex, mul­ti-sys­tem dis­ease

Biotech Voices is a collection of exclusive opinion editorials from some of the leading voices in biopharma on the biggest industry questions today. Think you have a voice that should be heard? Reach out to senior editors Kyle Blankenship and Amber Tong.

We often think a person’s transition from a healthy to a diseased state is binary. But that’s often not the case. In reality, the onset of a disease is not something that occurs overnight, and the majority lie on a continuum that is impacted by a multitude of factors. Some of these factors are in a patient’s control. Others are not.

This is the case in nonalcoholic fatty liver disease (NAFLD) and nonalcoholic steatohepatitis (NASH), two of the most complex diseases that “live” on this proverbial continuum. The clinical onset of NAFLD — and ultimately NASH — is a complex process that is closely related to obesity, insulin resistance and impaired adipose tissue metabolism.