A billion-dollar pharma startup that Silicon Valley has missed(techcrunch.com)
techcrunch.com
A billion-dollar pharma startup that Silicon Valley has missed
https://techcrunch.com/2017/01/06/this-millennial-wants-to-build-the-berkshire-hathaway-of-biopharmaceutical-companies-can-he-pull-it-off/?ncid=rss
33 comments
The big way they are figuring out how to repurpose old compounds that fell out of the pipeline is by using biomarkers.
We are now much more equipt at finding biomarkers, generally through gene sequencing. Drugs that failed, often failed because they were applied to an entire population of a disease (ie multiple sclerosis). Now, we can subset the MS population by different biomarkers and test just that small subset for efficacy.
While testing anyone that happens to have MS would show a massive failure rate, testing 5% of the population that has specific biomarkers, we may be able to show a huge increase in efficacy and thus the drug would be approved for MS patients that fit the exact bio marker profile.
We are now much more equipt at finding biomarkers, generally through gene sequencing. Drugs that failed, often failed because they were applied to an entire population of a disease (ie multiple sclerosis). Now, we can subset the MS population by different biomarkers and test just that small subset for efficacy.
While testing anyone that happens to have MS would show a massive failure rate, testing 5% of the population that has specific biomarkers, we may be able to show a huge increase in efficacy and thus the drug would be approved for MS patients that fit the exact bio marker profile.
biomarker validation is just as annoying as drug testing, so you're just punting the problem one node down.
it's hard work: http://blogs.sciencemag.org/pipeline/archives/2013/12/04/can...
nominal biomarkers can be wholly spurious: http://blogs.sciencemag.org/pipeline/archives/2012/04/10/bio...
biomarkers that we believe to be proxies for disease conditions (like LDL) can be targeted to no effect: http://blogs.sciencemag.org/pipeline/archives/2016/12/14/sim...
etc.
it's hard work: http://blogs.sciencemag.org/pipeline/archives/2013/12/04/can...
nominal biomarkers can be wholly spurious: http://blogs.sciencemag.org/pipeline/archives/2012/04/10/bio...
biomarkers that we believe to be proxies for disease conditions (like LDL) can be targeted to no effect: http://blogs.sciencemag.org/pipeline/archives/2016/12/14/sim...
etc.
There is another consequence: the FDA may allow you to classify the compound as an orphan drug based on a much smaller market than the entire disease pool. This greatly reduces the burden of getting a drug approved because orphan drugs have too few patients to justify the expense of the usual approval process and the FDA gives them special treatment for humanitarian reasons and to promote a wider field of research than just the drugs with large profit potential.
I didn't think the article was so scathing. It was very inside baseball from my software engineer basis, hard to understand what he was getting at. On the other hand, the article about axovant (the $5mil cast off drug they spun into a 1.x billion dollar company and it apparently doesn't work), that article was persuasive that I should short this. How come the axovant stock hasn't collapsed.
If you're confident this is true... why not short the stock? if correct, you could make a lot of money.
Exactly Derek Lowe is a classic academic without any skin in the game. Rather than appreciating risk taking he displays the sour grapes mentality. He is always welcome to short the stock. But then this kind skepticism against anyone else becoming rich sells very well in academic circles.
you do realize he works for a pharma company, right? The last time he was an academic was when he was a postdoc. In the mid-80s.
he's discussed his stock positions a few times; the takeaway is along the lines of "i don't have any holdings that could be construed as bias as regards where this blog is hosted; otherwise it's my own business" if i remember right.
he's discussed his stock positions a few times; the takeaway is along the lines of "i don't have any holdings that could be construed as bias as regards where this blog is hosted; otherwise it's my own business" if i remember right.
Thats even worse. Derek Lowe is playing the classic no one ever went broke being skeptic move. These blogs are written to assuage egos of underpaid academics, who can't stand wealth creation nor understand risk taking. In fact if he really belives it then he must put money behind his words. And then donate earnings to whatever cause he believes in. Untill then its just sour grapes.
Is it public?
From the article:
>It was the biggest biotech IPO ever in the U.S., raising $360 million. It has largely held up, too. Axovant’s shares, which opened at $15, currently trade around $13.25.
and further down:
> When Axovant went public, a columnist at FierceBiotech warned that it should “scare the hell” out of investors
>It was the biggest biotech IPO ever in the U.S., raising $360 million. It has largely held up, too. Axovant’s shares, which opened at $15, currently trade around $13.25.
and further down:
> When Axovant went public, a columnist at FierceBiotech warned that it should “scare the hell” out of investors
"The market can remain irrational longer than you can remain solvent." The quote itself may be apocryphal, but the meaning is certainly true.
Never short based on the rationality of the market. Plenty of investors have been right and ended up totally broke.
On a personal note the worst investment I ever made was a short position where I was right, but six months too early.
On a personal note the worst investment I ever made was a short position where I was right, but six months too early.
Reminds me of Michael Burry and others in The Big Short, who shorted the housing market, but had to wait a long time for the market adjust.
Never short a stock, use puts. You define your maximum potential loss ahead of time. By doing so you can entirely remove the solvency factor in question. Then it becomes a matter of giving yourself enough time on the puts to be right (assuming your core premise is correct).
You're assuming puts of sufficient duration would be available and liquid.
A friend of mine who used to work for a hedge fund on the short book had an adage... Good plays when CEOs suddenly do a lot of press.
as in, whenever a CEO does a bunch of press, the co is a good candidate to short? just want to check i'm interpreting correctly
Yeah I was examining long-term puts on the company but decided it was a bad idea since my roommate reminded me Trump's pick for the FDA may scrap phase III altogether (which is a policy I'm not entirely opposed to; PIII tests efficacy not safety, and presumably the drugs could be tested for efficacy by independent NGOs, like what UL does for electronics)
Phase 3 certainly does test safety. It's a bigger trial and safety signals often pop up that didn't in phase 2.
Torceptipib is a great example. Phase 2 looked great; phase 3 was stopped due to an increase in deaths.
Torceptipib is a great example. Phase 2 looked great; phase 3 was stopped due to an increase in deaths.
In that sense you could make the argument that 'selling approved drugs on the market' also tests safety. To the point that the FDA has created the pseudo-category "phase 4". Vioxx looked great. Was recalled due to an increase in deaths (which was actually counted in exactly the way you shouldn't, if you've ever read the "how not to run an A/B test").
Phase 4 recalls are relatively rare thanks to the extra testing in Phase 3. If you removed Phase 3 then the number of recalls would dramatically increase as would the number of deaths.
Even if they abandon PIII, FDA needs efficacy data. So, these companies would stop running underpowered PII trials. Then companies can't use posthoc analysis from PII to submit NDA. So, they need to run another PII with biomarkers identified in the posthoc analysis. There are lots of nanocap biotechs running scams just to advance to PIII after showing minimal efficacy in PII; these companies' execs just wanna milk huge salaries as long as the trials go on.
A more skeptical take. http://blogs.sciencemag.org/pipeline/archives/2017/01/11/121...
Tl;dr Alzheimer's is hard to drug, and the approach this company is trying has been tried before.
Tl;dr Alzheimer's is hard to drug, and the approach this company is trying has been tried before.
See also https://www.thestreet.com/story/13178707/1/inside-the-hedge-...
The plan is simple. You fund a company and spend $5mn acquiring the rights to a drug that might be worth billions (not very likely, if you can get it at that price). And before investing your own money to find out, you sell one fourth of that company for $360mn because "Hey, it could be worth billions!!!!"
The plan is simple. You fund a company and spend $5mn acquiring the rights to a drug that might be worth billions (not very likely, if you can get it at that price). And before investing your own money to find out, you sell one fourth of that company for $360mn because "Hey, it could be worth billions!!!!"
Who on earth bought into that IPO? Who priced it? Did they really just spend 5mm on rights to a drug, put it in a shell company, and then convince the public via IPO that it was worth 1.3+ billion?
This sounds like a pump and dump or money extraction scheme. I imagine it was mostly sold to pensions, etc.
This sounds like a pump and dump or money extraction scheme. I imagine it was mostly sold to pensions, etc.
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Too much hype, too little proof. Until then, this is pure shit, nothing more.
SV BS spreading from software to Biotech/Pharma.
SV BS spreading from software to Biotech/Pharma.
> Whether the scheme will work longer term isn’t clear
> https://www.google.com/finance?q=NYSE%3AAXON&fstype=ii&ei=2U...
Wait, what? How is this a startup and how does this have anything to do with SV...
TC is really reaching here...
> https://www.google.com/finance?q=NYSE%3AAXON&fstype=ii&ei=2U...
Wait, what? How is this a startup and how does this have anything to do with SV...
TC is really reaching here...
I highly doubt Shkreli was interested in treating toxicoplasmosis, or had a "small company."
I think the HN moderators need to remove things like this.
I think the HN moderators need to remove things like this.
Abandoned drug speculation? The business model looks like it's in a similar vein to patent troll
>You would never know, to read a lot of Ramaswamy’s press coverage (here’s a recent profile from TechCrunch) that the Axovant drug works through a mechanism that has failed twice in Alzheimer’s clinical trials so far.
>You wouldn’t know from such articles, though, that there have been (and are) other companies which have been formed around the idea of taking pharma cast-offs and getting them through the clinic (larger companies already try to monetize what they can in their portfolio by partnering or outlicensing, of course). The Medicines Company is one such dealmaker, acquiring and partnering late-stage compounds and trying to get them approved. Outside of the for-profit business model, there are a number of initiatives trying to repurpose or revive older compounds for new diseases.No one so far has been able to take over the world doing this. There are not, unfortunately, many big piles of such candidates sitting around. Most of the shelved compounds were shelved because (a) they did not work, and/or (b) they showed toxicity. You’re going to have to figure a way around those problems before you go back into humans, and that’s not easy. There are a few drugs that have been dropped for business reasons, or were lost or mishandled during a merger or the like, but I don’t think that there are enough of those to make a Ramaswamy drug empire.