| | | |   | Hello, everyone. Damian here with a reminder that "Augmented," STAT's first feature-length documentary, will premiere tonight on PBS. Get more info here. | | | Biotech’s magical thinking runs aground once more Karyopharm Therapeutics, a small biotech company with an approved blood cancer treatment, was already 2022’s best-performing biotech stock when, last week, the company pulled out of a scheduled appearance at an investor conference. This, in the occasionally over-active minds of some investors, is a sure-fire sign that a given company is close to announcing a buyout, and Karyopharm’s share price accordingly rose another 20% on Friday.
Then, yesterday morning, Karyopharm disclosed not a deal but a departure: Its chief medical officer had “stepped down to pursue other professional opportunities.” The stock fell 26% because, according to the logic above, a C-level executive wouldn’t be leaving a company if it were on the verge of selling itself at a premium.
All of this is disconnected from Karyopharm’s actual business of developing and selling medicines, but it’s indicative of the state of biotech in 2022, when buyouts seem to be the only things that reliably increase stock prices. As Jared Holz, the health care equity strategist with Oppenheimer, told STAT last month, “biotech seems to be the [sector] one where investors rally around a bull thesis because they think their company or their stock is going to be taken out.” | BioMarin’s chance to finally make some money BioMarin Pharmaceutical has been in business since 1997, and in the ensuing 25 years, the company has launched seven medicines and reached a $16 billion valuation. What it has never done is consistently turn a profit, but that, management promised, is going to change in 2022.
This afternoon, when BioMarin reports its 2021 financial results, we’ll get some clues as to how that’s going. Key to keeping the promise of profits is Voxzogo, a treatment for the most common cause of dwarfism, which BioMarin has said will become its biggest product ever. The company expects Voxzogo, approved in November, to make between $80 million and $110 million in 2022 and increase from there.
The other outstanding question relates to Roctavian, BioMarin’s gene therapy for hemophilia A. The FDA rejected the treatment in 2020 and told the company to come back when it had more data. BioMarin believes it now has enough information to please regulators and expects to refile Roctavian in the coming months. You can expect analysts to prod and pry for any details on the FDA’s feedback. | Almost every patient story starts with an image AI-augmented diagnostic imaging is driving new approaches to collaborative, patient-specific precision care. Read more. | An awkward disclosure for one biotech founder Thomas Gad, the founder and chairman of Y-Mab Therapeutics, has been forced to sell nearly $7 million of his stock in the troubled biotech company over the past two months to settle a margin call, according to SEC filings.
Gad’s financial troubles were triggered by Y-Mab’s long-delayed effort to secure approval of a drug to treat people with a rare type of nerve cancer. The FDA refused to review Y-Mab’s application for the drug called omburtumab in October 2020, instructing the company to submit more clinical data. Gad and other Y-Mab executives promised to refile the drug in late 2020 and throughout 2021, but those deadlines were all missed. The company now says it will resubmit omburtumab to the FDA by the end of March.
The prolonged omburtumab filing delay contributed to Y-Mab’s stock price falling from $40 to $8. The plunging value of Y-Mab’s stock was particularly problematic for Gad because he had pledged his ownership stake in the company as collateral on a margin loan. During a four-week period starting in the middle of January, Gad was forced to sell more than 700,000 shares of Y-Mab stock valued at $6.8 million to settle a margin call on that loan. The size of the loan and the name of the lender were not disclosed in the company’s SEC filings.
Gad is not the first biopharma executive to be forced to sell his stock holdings due to a margin loan. In 2015, the rapid devaluation of Valeant Pharmaceuticals’ stock price caused Goldman Sachs to call in a $100 million loan to former CEO Michael Pearson. | The pandemic has been tough on Patrick Soon-Shiong Patrick Soon-Shiong, whose vaccine-focused biotech company tripled in value in early 2021, has lost nearly a quarter of his personal wealth since June, according to Bloomberg, among the largest declines for the world’s wealthiest people.
The problem stems from ImmunityBio, a Soon-Shiong-founded company that has lost more than 80% of its value in the past 12 months. The downturn coincides with ImmunityBio’s merger with NantKwest, a foundering Soon-Shiong venture devoted to cancer therapies, and investors’ realization that the combined company’s Covid-19 vaccine won’t be up for approval any time soon.
Soon-Shiong has a plan to reverse his empire’s fortunes, and it involves more Nants. His latest company is NantSA, headquartered in his native South Africa, which will do business with ImmunityBio and manufacture 1 billion vaccine doses by 2025, according to Soon-Shiong. | More reads - 20 years ago, a landmark report spotlighted systemic racism in medicine. Why has so little changed? STAT
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- Covid-19 pill access at risk as pharmacies push for bigger payments. Wall Street Journal
| Thanks for reading! Until tomorrow,  | | | |
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