Tiny Innate reports a PhIIb disaster, battering shares — and a NY congressman
Reps. Chris Collins, R-NY, left, and Robert Pittenger, R-NC, leave a meeting of the House Republican Conference in the Capitol on June 7, 2017. CQ Roll Call
Just about everything the little Australian biotech Innate Immunotherapeutics tracked in its Phase IIb study of its experimental drug for multiple sclerosis points to a disaster. The data on all 93 patients in the study demonstrate a clear failure of the drug to deliver an improvement for patients on any of “multiple” endpoints. The dropout rate in the drug arm was high. And the rate of serious adverse events was higher in the drug arm than in the control group.
Innate (ASX Code: IIL) is going back over the data to see if the per protocol results on just the patients who had completed a sizable portion of the study did any better. But investigators aren’t trying to encourage anyone to believe in MIS416, delivered by IV once a week for a year. They say there is no reason to expect a change in outcomes.
All that is bad enough on its own. But even so, you may never have heard about any of this but for one fact: A prominent US congressman bet the ranch on this company’s stock — and evidently lost virtually all of it. Innate’s stock almost disappeared after investors got a look at the data, falling to a few pennies a share.
Bloomberg reporters, who have been covering this story, did the math and concluded that New York Republican Chris Collins, Innate’s biggest shareholder and a longtime believer, lost $16.7 million after taking the flier. And evidently a number of other Republicans, including HHS Secretary Tom Price, also lost money as well.
The connections between lawmakers in charge of healthcare policy and Innate have now reportedly inspired an ethics investigation into the role Collins played in attracting investors to the company. And in a story this morning, The Buffalo News reported that the FDA had just granted the biotech an IND to launch trials in the US, voiding the congressman’s claim that he had no conflicts because the biotech never had business in front of US regulators.
The biggest lesson from all this, though, may be that anyone who bets a large portion of their wealth on a biotech long shot like this — based in Sydney — doesn’t know much about investing, biotech or healthcare. Collins, for his part, doesn’t agree. “For those that invested in Innate, including me, we all were sophisticated investors who were aware of the inherent risk,” Collins says in a prepared statement. He adds: “For every successful drug, there are countless numbers that fail. That’s how today’s system works.”
Simon Wilkinson, Innate Immunotherapeutics’ chief executive said: “These results are a shock and definitely not what we were expecting based on our previous clinical experience with MIS416 and the reporting of treatment benefits we have received from many compassionate use patients over an extensive 8-year period. These data will be as distressing to them as they will be for all the stakeholders who were relying on the outcome of this study.”
Wilkinson can count his biggest investor and biggest loser as one of the most badly shocked of all.