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

A new era of treat­ment: How bio­mark­ers are chang­ing the way we think about can­cer

AJ Patel was recovering from a complicated brain surgery when his oncologist burst into the hospital room yelling, “I’ve got some really great news for you!”

For two years, Patel had been going from doctor to doctor trying to diagnose his wheezing, only to be dealt the devastating news that he had stage IV lung cancer and only six months to live. And then they found the brain tumors.

“What are you talking about?” Patel asked. He had never seen an oncologist so happy.

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Mihael Polymeropoulos, Vanda Pharmaceuticals CEO

Phar­ma com­pa­ny con­tin­ues its FDA law­suit spree, this time af­ter agency de­nies fast-track des­ig­na­tion

Vanda Pharmaceuticals is making a name for itself, at least in terms of suing the FDA.

The DC-headquartered firm on Monday filed its latest suit against the agency, with the company raising concerns over the FDA’s failure to grant a fast track designation for Vanda’s potential chronic digestive disorder drug tradipitant, which is a neurokinin 1 receptor antagonist.

Specifically, Vanda said FDA’s “essential point” in its one-page denial letter on the designation pointed to “the lack of necessary safety data,” which was “inconsistent with the criteria for … Fast Track designation.”

Mod­er­na seeks to dis­miss Al­ny­lam suit over Covid-19 vac­cine com­po­nent, claim­ing wrong venue

RNAi therapeutics juggernaut Alnylam Pharmaceuticals made a splash in March when it sued and sought money from both Pfizer and Moderna regarding their use of Alnylam’s biodegradable lipids, which Alnylam claims have been integral to the way both companies’ mRNA-based Covid-19 vaccines work.

But now, Moderna lawyers are firing back, telling the same Delaware district court that Alnylam’s claims can only proceed against the US government in the Court of Federal Claims because of the way the company’s contract is set up with the US government. The US has spent almost $10 billion on Moderna’s Covid-19 vaccine so far.

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Cracks in the fa­cade: Is phar­ma's pan­dem­ic ‘feel good fac­tor’ wan­ing?

The discordant effects of the Covid-19 pandemic on pharma reputation continues. While the overall industry still retains a respectable halo from its Covid-19 quick response and leadership, a new patient group study reveals a different story emerging in the details.

On one hand, US patient advocacy groups rated the industry higher-than-ever overall. More than two-thirds (67%) of groups gave the industry a thumbs up for 2021, a whopping 10 percentage point increase over the year before, according to the PatientView annual study, now in its 9th year.

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Michael Corbo, Pfizer CDO of inflammation & immunology

UP­DAT­ED: Plan­ning ahead for crowd­ed ul­cer­a­tive col­i­tis mar­ket, Pfiz­er spells out PhI­II da­ta on $6.7B Are­na drug

Pfizer has laid out the detailed results behind its boast that etrasimod — the S1P receptor modulator at the center of its $6.7 billion buyout of Arena Pharma — is the winner of the class, potentially leapfrogging an earlier entrant from Bristol Myers Squibb.

Pivotal data from the ELEVATE program in ulcerative colitis — which consists of two Phase III trials, one lasting 52 weeks and the other just 12 weeks — illustrate an “encouraging balance of efficacy and safety,” according to Michael Corbo, chief development officer of inflammation & immunology at Pfizer. The company is presenting the results as a late breaker at Digestive Disease Week.

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Robert Califf (Michael Brochstein/Sipa USA via AP Images)

House Re­pub­li­cans at­tack Chi­na-on­ly da­ta in FDA sub­mis­sions, seek new in­ves­ti­ga­tion in­to re­search in­spec­tions

Three Republican representatives are calling on the FDA to take a closer look at the applications including only clinical data from China.

The letter to FDA commissioner Rob Califf late last week comes as the agency recently rejected Eli Lilly’s anti-PD-1 antibody, which attempted to bring China-only data but ran into a bruising adcomm that may crush the hopes of any other companies looking to bring cheaper follow-ons based only on Chinese data.

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Amid mon­key­pox fears, biotechs spring to ac­tion; Mod­er­na’s CFO trou­ble; Cuts, cuts every­where; Craft­ing the right pro­teins; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

It’s always a bittersweet moment saying goodbye, but as Josh Sullivan goes off to new adventures we are grateful for the way he’s built up the Endpoints Manufacturing section — which the rest of the team will now carry forward. If you’re not already, this may be a good time to sign up for your weekly dose of drug manufacturing news. Thank you for reading and wish you a restful weekend.

Co­pay coupons gone wrong, again: Pfiz­er pays al­most $300K to set­tle com­plaints in four states

Pfizer has agreed to pay $290,000 to settle allegations of questionable copay coupon practices in Arizona, Colorado, Kansas, and Vermont from 2014 to 2018.

While the company has not admitted any wrongdoing as part of the settlement, Pfizer has agreed to issue restitution checks to about 5,000 consumers.

A Pfizer spokesperson said the company has “enhanced its co-pay coupons to alleviate the concerns raised by states and agreed to a $30,000 payment to each.”

Delaware court rules against Gilead and Astel­las in years-long patent case

A judge in Delaware has ruled against Astellas Pharma and Gilead in a long-running patent case over Pfizer-onwed Hospira’s generic version of Lexiscan.

The case kicked off in 2018, after Hospira submitted an Abbreviated New Drug Application (ANDA) for approval to market a generic version of Gilead’s Lexiscan. The drug is used in myocardial perfusion imaging (MPI), a type of nuclear stress test.