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

2023 Spot­light on the Fu­ture of Drug De­vel­op­ment for Small and Mid-Sized Biotechs

In the context of today’s global economic environment, there is an increasing need to work smarter, faster and leaner across all facets of the life sciences industry.  This is particularly true for small and mid-sized biotech companies, many of which are facing declining valuations and competing for increasingly limited funding to propel their science forward.  It is important to recognize that within this framework, many of these smaller companies already find themselves resource-challenged to design and manage clinical studies themselves because they don’t have large teams or in-house experts in navigating the various aspects of the drug development journey. This can be particularly challenging for the most complex and difficult to treat diseases where no previous pathway exists and patients are urgently awaiting breakthroughs.

Gossamer Bio CEO Faheem Hasnain at Endpoints' #BIO22 panel (J.T. MacMillan Photography for Endpoints News)

Gos­samer’s Fa­heem Has­nain de­fends a round of pos­i­tive PAH da­ta as a clear win. But can these PhII re­sults stand up to scruti­ny?

Gossamer Bio $GOSS posted a statistically significant improvement for its primary endpoint in the key Phase II TORREY trial for lead drug seralutinib on Tuesday morning. But CEO Faheem Hasnain has some explaining to do on the important secondary of the crucial six-minute walk distance test — which will be the primary endpoint in Phase III — as the data on both endpoints fell short of expectations, missing one analyst’s bar on even modest success.

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Kristen Hege, Bristol Myers Squibb SVP, early clinical development, oncology/hematology and cell therapy (Illustration: Assistant Editor Kathy Wong for Endpoints News)

Q&A: Bris­tol My­er­s' Kris­ten Hege on cell ther­a­py, can­cer pa­tients and men­tor­ing the next gen­er­a­tion

Kristen Hege leads Bristol Myers Squibb’s early oncology discovery program carrying on from the same work at Celgene, which was acquired by BMS in 2019. She’s known for her early work in CAR-T, having pioneered the first CAR-T cell trial for solid tumors more than 25 years ago.

However, the eminent physician-scientist is more than just a drug developer mastermind. She’s also a practicing physician, mother to two young women, an avid backpacker and intersecting all those interests — a champion of young women and people of color in STEM and life sciences.

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Eisai and METAvivor plan to debut the latest 'This is MBC' campaign at the San Antonio Breast Cancer Symposium (SABCS).

Ei­sai re-ups metasta­t­ic breast can­cer aware­ness cam­paign with strik­ing pa­tient pho­tographs

Eisai is debuting the newest ads in its long-running “This is MBC” campaign this week. In what’s become an annual tradition, Eisai and metastatic breast cancer advocacy partner METAvivor will show the striking photographs of people living with metastatic breast cancer first at the San Antonio Breast Cancer Symposium (SABCS).

The new “Imagine” campaign features 12 patients photographed around waterfalls to symbolize that same kind of sudden drop into a pool that MBC causes in a person’s life, said Beth Fairchild, co-founder of #CancerCulture who was the president of METAvivor six years ago when the campaign began. Fairchild, who is living with MBC, has helped create all of the annual “This is MBC” campaigns.

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Pfiz­er and BioN­Tech look to toss Mod­er­na patent suit, call­ing claims 'unen­force­able'

Pfizer and BioNTech took a swing at Moderna’s Covid-19 patent claims in Massachusetts federal court on Monday, calling them “invalid,” “overbroad” and “unenforceable.”

The defendants also filed counterclaims against the Cambridge, MA-based biotech, seeking a dismissal of the case, recovery of court fees and an official judgment invalidating Moderna’s claims.

Moderna sued Pfizer and BioNTech back in August, alleging that the partners’ Covid-19 vaccine Comirnaty copied parts of Moderna’s vaccine technology patented before the pandemic, when it was developing an mRNA vaccine for MERS, another respiratory illness.

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Glen­mark hit with warn­ing let­ter over pro­ce­dures, qual­i­ty con­trol is­sues at In­dia man­u­fac­tur­ing plant

The generics producer Glenmark Pharmaceuticals has been handed a warning letter by US regulators.

The letter, which was sent to the manufacturer on Nov. 22, noted issues from an inspection over the summer at Glenmark’s facility in the town of Colvale, India, in the state of Goa.

According to the letter, the FDA found that Glenmark’s investigation of rejected batches of drugs “failed to extend to other batches, dosage strengths, and drug products.” The warning letter also noted that the site had failed to establish “adequate written procedures” for production and process control to ensure drugs have the correct strength, quality and purity.

Klick Health is lighting the way, literally, this holiday season to encourage connection for lonely seniors in long-term care facilities.

Klick Health an­nu­al hol­i­day spot­light se­nior lone­li­ness and the pow­er of con­nec­tion

Every year Klick Health leans into a cause for the holidays, and this year it’s highlighting the sometimes lonely season for seniors. So Klicksters, as employees call themselves, decided to brighten one nursing home community in hopes of inspiring others to do the same.

Klick literally lit up the Tony Stacey Centre for Veterans Care, a long-term care home in Toronto where 75% of residents receive no visitors during the holiday season. The agency brought staff and family along with lighting crews and musicians for a “Light the Way” event, creating a video of the experience debuting on Tuesday.

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Sum­i­to­vant sub­sidiaries En­zy­vant and Al­ta­vant merge in­to com­bined com­pa­ny

Two Sumitovant Biopharma entities are merging under one name, effective immediately.

Enzyvant Therapeutics and Altavant Sciences announced they have merged to form a singular entity focused on developing therapies for patients with rare diseases. The combined company will keep the name Enzyvant and along with clinical development will eventually include in-house manufacturing.

Bill Symonds, the current CEO of both Altavant and Enzyvant, is now CEO of the merged company.

Rick Modi, Affinia Therapeutics CEO

Ver­tex-part­nered gene ther­a­py biotech Affinia scraps IPO plans

Affinia Therapeutics has ditched its plans to go public in a relatively closed-door market that has not favored Nasdaq debuts for the drug development industry most of this year. A pandemic surge in 2020 and 2021 opened the doors for many preclinical startups, which caught Affinia’s attention and gave the gene therapy biotech confidence in the beginning days of 2022 to send in its S-1.

But on Friday, Affinia threw in the S-1 towel and concluded now is not the time to step onto Wall Street. The biotech has put out few public announcements since the spring of this year. Endpoints News picked the startup as one of its 11 biotechs to watch last year.

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