Trou­bled MiMedx ax­es a quar­ter of its work­force in the wake of a C-suite purge

Re­mem­ber when MiMedx $MXDG got rid of its CEO and COO to pre­pare the com­pa­ny “for its next chap­ter”? The trou­bled biotech now says that 240 of its full-time em­ploy­ees will be left out of that chap­ter.

The lay­offs, which ac­count for 24% of MiMedx’s to­tal work­force, are part of a sweep­ing re­or­ga­ni­za­tion with the aim of slim­ming down its cost struc­ture to stay afloat.

David Coles

MiMedx’s woes first came un­der the spot­light in Feb­ru­ary, weeks af­ter the FBI showed up at the door of a short sell­er who’s been hurl­ing in­sults against the com­pa­ny and its ex-CEO, Park­er “Pe­te” Pe­tit. The short sell­er, Marc Co­hodes, made a com­plaint to the De­part­ment of Jus­tice.

As it soon emerged, the DOJ seemed to al­ready be busy in­ves­ti­gat­ing MiMedx’s sales and dis­tri­b­u­tion prac­tices.

The com­pa­ny, which makes tis­sue grafts used to treat burns and soft tis­sue wounds, has faced law­suits brought by ex-em­ploy­ees who al­lege the com­pa­ny has fraud­u­lent­ly boost­ed its sales. It’s spent sev­er­al years chal­leng­ing the FDA, which says its grafts don’t meet reg­u­la­to­ry stan­dards.

In Wednes­day’s an­nounce­ment, MiMedx of­fers an up­date from its au­dit com­mit­tee, whose on­go­ing in­ves­ti­ga­tion is al­so in­cur­ring “sig­nif­i­cant le­gal and ac­count­ing-re­lat­ed ex­pens­es.” Their find­ings have al­ready led to pro­posed “changes to busi­ness prac­tices to ad­dress is­sues iden­ti­fied in the in­ves­ti­ga­tion,” the com­pa­ny writes with­out spelling out specifics.

The is­sues run deep, MiMedx says, which is why it will take yet some more time to re­lease the al­ready de­layed fi­nan­cial state­ments for 2017 — to­geth­er with those from the pre­vi­ous five years that it promised to re­state fol­low­ing the in­ter­nal in­ves­tig­tion.

(M)an­age­ment has ex­pand­ed the scope of work in con­nec­tion with the prepa­ra­tion of the Com­pa­ny’s fi­nan­cial state­ments and is un­able to es­ti­mate the ex­pect­ed com­ple­tion date at this time.

De­spite all these, in­ter­im CEO David Coles in­sists there is a way for­ward.

“To­day’s an­nounce­ment is a con­tin­u­a­tion of man­age­ment’s ef­forts to po­si­tion the busi­ness for long-term suc­cess by fo­cus­ing on our wound care busi­ness, where our clin­i­cal stud­ies best sup­port pa­tient out­comes and for which re­im­burse­ment pol­i­cy has tra­di­tion­al­ly been more sta­ble,” he says in a state­ment.

Sean Parker, AP

Sean Park­er helps cre­ate a CRISPRed cell ther­a­py 2.0 play — and he’s got a high-pro­file set of lead­ers on the team

You can rack up one more high-profile debut effort in the wave of activity forming around cell therapy 2.0. It’s another appealing Bay Area group that’s attracted some of the top hands in the business to a multi-year effort to create a breakthrough. And they have $85 million in hand to make that first big step to the clinic.

Today it’s Ken Drazan and the team at South San Francisco-based ArsenalBio that are coming from behind the curtain for a public bow, backed by billionaire Sean Parker and a collection of investors that includes Beth Seidenberg’s new venture investment operation based in LA.
Drazan — a J&J Innovation vet with a long record of entrepreneurial endeavors — exited the stage in 2018 when his last mission ended as he stepped aside as president of Grail. It wasn’t long, though, before he was helping out with a business plan for ArsenalBio that revolved around the work of a large group of interconnected scientists supported by the Parker Institute for Cancer Immunology.

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Alice Shaw, Lung Cancer Foundation of America

Top ALK ex­pert and can­cer drug re­searcher Al­ice Shaw bids adieu to acad­e­mia, hel­lo to No­var­tis

Jay Bradner has recruited a marquee oncology drug researcher into the ranks of the Novartis Institutes for BioMedical Research. Alice Shaw is jumping from prestigious posts intertwined through Mass General, Harvard and Dana-Farber to take the lead of NIBR’s translational clinical oncology group.

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Flu Virus (Source: CDC)

FDA ex­pands Xofluza ap­proval as Roche strug­gles to catch loom­ing flu mar­ket

As a potentially powerful flu season looms, so does a big test for Roche and its new flu drug, Xofluza. The Swiss giant just got a small boost in advance of that test as the FDA expanded Xofluza’s indication to include patients at high risk of developing flu-related complications.

Xofluza (baloxavir marboxil) was approved last October in the US, the first landmark flu drug approval in 20 years and a much-needed green light for a company that had watched its leading flu drug Tamiflu get eaten alive by generics. Like its predecessor, the pill offered a reduction in flu symptoms but not a cure.

EMA backs sev­en ther­a­pies, in­clud­ing Mer­ck­'s Ebo­la vac­cine

The first-ever Ebola vaccine is on the precipice of approval after the European Medicine’s Agency (EMA) backed the Merck product in this week’s roster of recommendations.

The drugmaker $MRK began developing the vaccine, christened Ervebo, during the West African outbreak that occurred between 2014 and 2016, killing more than 11,000.

The current outbreak in the Democratic Republic of Congo (DRC) has shown case fatality rates of approximately 67%, the agency estimated. Earlier this year, the WHO declared the outbreak — which so far has infected more than 3,000 people — a public health emergency of international concern.

Ronald Herb­st fol­lows Med­Im­mune ex­o­dus to Pyx­is CSO post; Jeff God­dard to suc­ceed CEO of AIT Bio­science

→ The outflow of top execs from MedImmune continues to fill the leadership ranks of smaller biotechs. The latest to take off is Ronald Herbst, the head of oncology research, who’s assuming the CSO post at Pyxis Oncology.  

Herbst was part of the old MedImmune organization AstraZeneca CEO Pascal Soriot restructured earlier this year, reorganizing the company and eliminating the storied subsidiary as a separate organization.

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Mi­rati preps its first look at their KRAS G12C con­tender, and they have to clear a high bar for suc­cess

If you’re a big KRAS G12C fan, mark your calendars for October 28 at 4:20 pm EDT.

That’s when Mirati $MRTX will unveil its first peek at the early clinical data available on MRTX849 in presentations at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston.

Mirati has been experiencing the full effect of a rival’s initial success at targeting the G12C pocket found on KRAS, offering the biotech some support on the concept they’re after — and biotech fans a race to the top. Amgen made a big splash with its first positive snapshot on lung cancer, but deflated sky-high expectations as it proved harder to find similar benefits in other types of cancers.

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The FDA will hus­tle up an ex­pe­dit­ed re­view for As­traZeneca’s next shot at a block­buster can­cer drug fran­chise

AstraZeneca paid a hefty price to partner with Daiichi Sankyo on their experimental antibody drug conjugate for HER2 positive breast cancer. And they’ve been rewarded with a fast ride through the FDA, with a straight shot at creating another blockbuster oncology franchise.

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Med­ical an­i­ma­tion: Mak­ing it eas­i­er for the site and the pa­tient to un­der­stand

Medical animation has in recent years become an increasingly important tool for conveying niche information to a varied audience, particularly to those audiences without expertise in the specialist area. Science programmes today, for example, have moved from the piece-to-camera of the university professor explaining how a complex disease mechanism works, to actually showing the viewer first-hand what it might look like to shrink ourselves down to the size of an ant’s foot, and travel inside the human body to witness these processes in action. Effectively communicating a complex disease pathophysiology, or the novel mechanism of action of a new drug, can be complex. This is especially difficult when the audience domain knowledge is limited or non-existent. Medical animation can help with this communication challenge in several ways.
Improved accessibility to visualisation
Visualisation is a core component of our ability to understand a concept. Ask 10 people to visualise an apple, and each will come up with a slightly different image, some apples smaller than others, some more round, some with bites taken. Acceptable, you say, we can move on to the next part of the story. Now ask 10 people to visualise how HIV’s capsid protein gets arranged into the hexamers and pentamers that form the viral capsid that holds HIV’s genetic material. This request may pose a challenge even to someone with some virology knowledge, and it is that inability to effectively visualise what is going on that holds us back from fully understanding the rest of the story. So how does medical animation help us to overcome this visualisation challenge?

Hal Barron, GSK's president of R&D and CSO, speaks to Endpoints News founder and editor John Carroll in London at Endpoints' #UKBIO19 summit on October 8, 2019

[Video] Cel­e­brat­ing tri­al fail­ures, chang­ing the cul­ture and al­ly­ing with Cal­i­for­nia dream­ers: R&D chief Hal Bar­ron talks about a new era at GSK

Last week I had a chance to sit down with Hal Barron at Endpoints’ #UKBIO19 summit to discuss his views on R&D at GSK, a topic that has been central to his life since he took the top research post close to 2 years ago. During the conversation, Barron talked about changing the culture at GSK, a move that involves several new approaches — one of which involves celebrating their setbacks as they shift resources to the most promising programs in the pipeline. Barron also discussed his new alliances in the Bay Area — including his collaboration pact with Lyell, which we covered here — frankly assesses the pluses and minuses of the UK drug development scene, and talks about his plans for making GSK a much more effective drug developer.

This is one discussion you won’t want to miss. Insider and Enterprise subscribers can log-in to watch the video.

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