Small cap im­munother­a­py play­er Zio­pharm faces an ac­tivist at­tack, re­bukes call for board seats

Zio­pharm On­col­o­gy is at­tempt­ing to fend off an ac­tivist at­tack.

The Boston-based biotech sent a let­ter to share­hold­ers Mon­day urg­ing them to re­ject the pro­pos­als from mi­nor­i­ty in­vestor Wa­ter­Mill As­set Man­age­ment Corp that would re­place half the com­pa­ny’s board. Zio­pharm’s let­ter, which was pub­lished in full Mon­day morn­ing, stat­ed that the firm’s pro­posed three new board mem­bers, in­clud­ing Wa­ter­Mill founder Robert Post­ma, lack the qual­i­fi­ca­tions to run a pub­lic com­pa­ny.

Lau­rence Coop­er

“Giv­en the board’s past re­cep­tive­ness to share­hold­er feed­back in the board re­fresh­ment process, it is dis­ap­point­ing that Wa­ter­Mill, an ap­prox­i­mate­ly 3.3% share­hold­er, is now at­tempt­ing to gain a dis­pro­por­tion­ate amount of in­flu­ence on the board,” Zio­pharm CEO Lau­rence Coop­er and chair­man Scott Tar­riff wrote.

Wa­ter­Mill, mean­while, al­leges that Zio­pharm’s busi­ness plan has been detri­men­tal to share­hold­er val­ue with the com­pa­ny’s stock down rough­ly 50% since the start of 2020. New board mem­bers are need­ed to turn the ship around, Wa­ter­Mill says, and the firm has specif­i­cal­ly re­quest­ed that Tar­riff and three oth­ers step down — Scott Braun­stein, Kevin Buchi and Elan Ez­ick­son.

Scott Tar­riff

Post­ma al­so said in a state­ment that at Zio­pharm’s an­nu­al meet­ing a few months ago, a ma­jor­i­ty of share­hold­ers raised con­cerns about Braun­stein, Ez­ick­son and a third board mem­ber who has since been re­placed. The com­pa­ny pur­port­ed­ly re­spond­ed to the com­plaints with “clear dis­dain” and in­stalled the oust­ed board mem­ber’s boss, de­spite say­ing they’d hire an out­side firm to con­duct a search, Post­ma claims.

“It is now ev­i­dent to us — and hope­ful­ly all oth­er share­hold­ers — that Zio­pharm’s cur­rent lead­er­ship has no cred­i­ble plans to en­hance cor­po­rate gov­er­nance, halt di­lu­tive ac­tions, im­prove dis­clo­sures, align man­age­ment’s com­pen­sa­tion to tan­gi­ble re­sults,” Post­ma said.

Zio­pharm says it has en­gaged with Wa­ter­Mill in good faith and has al­ready im­ple­ment­ed some of the changes ad­vo­cat­ed by the firm, in­clud­ing adding James Huang to the board this past Ju­ly. The com­pa­ny al­so says two of Wa­ter­Mill’s pro­posed new board mem­bers have not ac­cept­ed in­vi­ta­tions for in­ter­views.

Kevin Buchi

Ac­cord­ing to Zio­pharm’s web­site, the com­pa­ny’s newest board mem­ber, Kevin Buchi, joined in Sep­tem­ber. Buchi cur­rent­ly serves as chair­man of Dicer­na Phar­ma­ceu­ti­cals, where the since-oust­ed Zio­pharm board mem­ber, Dou­glas Pagán, is the CFO.

Wa­ter­Mill de­clined to com­ment be­yond Post­ma’s state­ment. Zio­pharm did not re­spond to a re­quest for com­ment by Tues­day morn­ing.

Zio­pharm has seen heavy churn at the board lev­el in the last year and a half, ap­point­ing four new mem­bers since June 2019. It notes that all those new mem­bers have come on board since Zio­pharm sep­a­rat­ed from Pre­ci­gen in 2018.

The biotech’s share prices have not ful­ly re­cov­ered since a pa­tient died in a gene ther­a­py study back in 2016. In that in­stance, the pa­tient de­vel­oped an in­tracra­nial he­m­or­rhage 15 days af­ter start­ing treat­ment, though it was deemed to be un­re­lat­ed to the treat­ment. The ther­a­py was de­signed to di­rect the im­mune sys­tem to at­tack brain tu­mors.

Then in 2018, Zio­pharm was forced to hit the brakes on a CAR-T ther­a­py when the FDA placed a clin­i­cal hold on its Phase I study of a treat­ment that could be built in 2 days to ex­press CD-19, IL-15 and a safe­ty switch for CD-19/pos­i­tive leukemias and lym­phomas. Ear­li­er this year, though, Zio­pharm saw some ear­ly, pos­i­tive over­all sur­vival da­ta for their con­trolled IL-12 treat­ment in glioblas­toma. The com­pa­ny is al­so look­ing at com­bin­ing that ex­per­i­men­tal drug with Re­gen­eron’s Lib­tayo.

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While oncology researchers have long pursued the potential of cellular immunotherapies for the treatment of cancer, it was unclear whether these therapies would ever reach patients due to the complexity of manufacturing and costs of development. Fortunately, the recent successful development and regulatory approval of chimeric antigen receptor-engineered T (CAR-T) cells have demonstrated the significant benefit of these therapies to patients.

Stéphane Bancel, Moderna CEO

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Even as public health officials remain guarded about their comments on the likelihood Omicron will escape the reach of the currently approved Covid-19 vaccines, there’s growing scientific consensus that we’re facing a variant that threatens to overwhelm the vaccine barricades that have been erected.

Stéphane Bancel, the CEO of Moderna, one of the leading mRNA players whose quick vault into the markets with a highly effective vaccine created an instant multibillion-dollar market, added his voice to the rising chorus early Tuesday. According to Bancel, there will be a significant drop in efficacy when the average immune system is confronted by Omicron. The only question now is: How much?

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Philip Dormitzer, new GSK global head of vaccines R&D

Glax­o­SmithK­line poach­es Pfiz­er's vi­ral vac­cines lead in rush to cap­i­tal­ize on fu­ture of mR­NA

GlaxoSmithKline has appointed Philip Dormitzer, formerly chief scientific officer of Pfizer’s viral vaccines unit, as its newest global head of vaccines R&D, looking to leverage one of the leading minds behind Pfizer and BioNTech’s RNA collaboration that led to Covid-19 jab Comirnaty, the British drug giant said Tuesday.

Dormitzer had been with Pfizer for a little more than six years, joining up after a seven-year stint with Novartis, where he reached the role of US head of research and head of global virology for the company’s vaccines and diagnostics unit.

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In­tro­duc­ing End­points Stu­dio, a new way to ad­ver­tise with End­points-craft­ed brand­ing cam­paigns

Since our start in 2016, Endpoints has grown fast while executing our mission to cover biopharma’s most critical developments for industry pros worldwide. As readership has grown, our advertising business has too. Endpoints advertising partners support the mission and engage their desired audiences through announcements on our email and web platforms, brand recognition in our event coverage and sponsorships of Endpoints daily and weekly reports.

What's fair? New ICER re­port shows pay­ers gen­er­al­ly en­sur­ing fair ac­cess to drugs

The nonprofit Institute for Clinical and Economic Review on Wednesday released a new report highlighting the ways in which payers are generally ensuring fair access to prescription drugs, even when based on a set of criteria set by the nonprofit.

While noting the lack of transparency hindered the report’s results, ICER said that the “great majority” of payer policies in the formularies evaluated are structured in a way to support many key elements of how ICER defines “fair access.”

With on­ly burns to show in gene ther­a­py, Astel­las inks deal with AAV spe­cial­ist Dyno in push for a bet­ter cap­sid

On the hunt for a better AAV capsid for gene therapy, Eric Kelsic’s Dyno Therapeutics has set itself apart with its focus on machine learning to help speed discovery. Now, Japanese drugmaker Astellas — fresh off a slate of gene therapy burns — is taking a bet on Dyno as it looks to the future.

Astellas and Dyno will work together as part of an R&D pact to develop next-gen AAV vectors for gene therapy using Dyno’s CapsidMap platform directed at skeletal and cardiac muscle, the companies said Wednesday. Under the terms of the deal, Dyno will design AAV capsids for gene therapy, while Astellas will be responsible for conducting preclinical, clinical and commercialization activities for gene therapy product candidates using the capsids.

As first Omi­cron case in US crops up, re­searchers won­der: which an­ti­bod­ies, vac­cines will hold up?

As Covid-19 drug and vaccine developers race to figure out which of their products might be hampered by the new variant, the CDC on Wednesday afternoon announced the first confirmed case of the Omicron variant (B.1.1.529) in the US, found in San Francisco.

The unidentified individual was a traveler who returned from South Africa on Nov. 22, 2021, was fully vaccinated, and had mild symptoms that the CDC described as improving. All close contacts have been contacted and have tested negative, the centers said.

GSK 'Target the Future' Ad Campaign

Glax­o­SmithK­line's friend­ly ‘shark tank’ crowd­sources ideas for mul­ti­ple myelo­ma, kicks off big­ger push

GlaxoSmithKline is inviting everyone to its friendly shark tank. Its “Think Tank” challenge launching today aims to gather the best pitches for ideas in multiple myeloma with a final pitch-off “Shark Tank” TV show-style finish next year.

The innovation contest kicks off GSK’s bigger “Target the Future” unbranded campaign to advance innovation and awareness in multiple myeloma.

“We have a good sense of where the unmet need lies and what tools may be welcomed by this community, and we’ll continue to do that as part of this program, but the ‘Think Tank’ kickoff is to bring new ideas to the table — things that come from a more grassroots perspective than a large pharma perspective,” Christine Roth, senior VP and global head of oncology at GSK, said.

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Ap­peals court puts the fi­nal nail in the cof­fin for Tec­fidera patent, adding to Bio­gen's bur­geon­ing set­backs

In another setback for Biogen, the big biotech lost its appeal to revive a patent for the once-blockbuster drug Tecfidera, marking a likely conclusion to the case.

The US Court of Appeals for the Federal Circuit issued the ruling Tuesday morning, saying Biogen failed to satisfy the “written description” requirement for patent law. As a result, Mylan-turned-Viatris will be able to sell its multiple sclerosis generic without fear of infringement and Biogen will have to find a new revenue driver elsewhere.

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