| |   | Hello, everyone. Damian here with the fallout from a short report, a checkup on everyone's favorite SPACs, and an update on a recent fiasco in Alzheimer's disease research. | | | Natera lost $1.7 billion in three hours Natera, a maker of diagnostic tests, began the day yesterday as a $5 billion company with plans to grow its sales by about 25% in 2022. By noon, it had lost nearly 40% of its value thanks to short-seller accusations that its revenues were propped up by deceptive practices.
According to the vividly named Hindenburg Research, Natera’s growth is the product of aggressively pushing expensive tests, using a third party to get around skeptical insurers, and then double-billing patients and payers. According to Natera, this is “the same story short sellers have been pitching for many years,” and the company “maintains a mature compliance program and we believe our procedures in regard to prior authorization services and billing are compliant with applicable laws.”
What’s interesting about the argument is it’s unclear when we’ll know who’s right. Natera’s sales grew more than 50% last year, and the company is expecting another 25% boost this year. Even if Hindenburg is right and Natera’s growth is unsustainable, the firm doesn’t specify just how its claims might be proven. | Biotech’s biggest SPACs are deep underwater EQRx, Ginkgo Bioworks, and 23andMe — last year’s highest-profile biotech companies to go public through SPACs — have each lost more than half of their valuations in less than a year, underperforming the broader biotech index in what has been a painful year for the sector.
Ginkgo, a synthetic biology company that debuted at a roughly $15 billion valuation, is down 65% since September in the wake of a lengthy takedown from a short seller and mounting skepticism that its underlying technology will ever grow into a sustainable business. 23andMe, the consumer genetics company with drug-development aspirations, has fallen about 60%. And EQRx, a firm founded to develop lower-cost competitors to pricey medicines, is down 65% just four months after going public thanks to the FDA’s objections to a core pillar of its plans.
Meanwhile, the broader biotech sector is down about 24% in 2022, weighed down by a painful correction for companies that reached all-time highs at the height of the Covid-19 pandemic. | How continuous glucose monitors are transforming diabetes care Continuous glucose monitoring, or CGM, is transforming diabetes care. Where a diagnosis once meant a lifetime of finger pricking and injections, these devices now help achieve less invasive monitoring and treatment for the millions of Americans living with diabetes. With prescriptions of CGMs increasing, the question remains — can these devices become the standard of care? Our latest report looks to answer this question, analyzing our best intelligence on the burgeoning industry of CGM, and examining where the industry is likely to head next. | Despite Moderna’s decline, Stéphane Bancel is still a billionaire Moderna has lost about half its value since the start of the year, but the company is still worth nearly $60 billion — and that means CEO Stéphane Bancel, who owns a roughly 8% stake, remains comfortably in biotech’s billionaire club.
That’s among the revelations in Moderna’s 2021 proxy statement, posted yesterday. Bancel’s compensation added up to $18.4 million in cash and stock, which, thanks to a fairly recent SEC rule, Moderna had to disclose was 136 times that of the company’s median employee.
One curious line item: Moderna spent nearly $1 million on “security services” for chairman Noubar Afeyan “in response to the heightened threat environment faced by individuals associated with our company as we have developed our Covid-19 vaccine.” As a comparison, Pfizer, which also developed a Covid-19 vaccine, spent $1,114 on security for CEO Albert Bourla in 2020, the most recent year for which numbers are available. | If it doesn’t work in Alzheimer’s, why not cancer? Cortexyme, which recently parted ways with two top executives after its lead drug failed in a pivotal Alzheimer’s disease trial, has a new idea for the same treatment: preventing cancer.
The news, disclosed yesterday, is that Cortexyme has conducted preclinical studies and now believes its drug, which targets the bacteria responsible for gingivitis, could help patients with potentially malignant oral disorders from progressing to cancerous growth. The company said it’s ready to begin a Phase 2 study to test the theory and will make its case to the FDA before the middle of this year.
Last year, Cortexyme was similarly confident that atuzaginstat could slow the progression of Alzheimer’s. In October, the drug proved no better than placebo, and Cortexyme has lost about 90% of its value ever since. CEO Casey Lynch left the company in February, joined by its chief scientific officer. | More reads - First person to receive a pig heart transplant dies after two months. Associated Press
- New research casts doubt on a cornerstone of thyroid cancer treatment. STAT
- Dozens of towns and counties object to ‘hush money’ tied to Purdue opioid settlement. STAT+
| Thanks for reading! Until tomorrow,  | | | |
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