Life Science Today 066 – Cassava, Reify, Humacyte, Pfizer + Moderna + FDA, Ascendis

Originally Published as The Niche Podcast
The Cassava saga, Reify goes big… too big? Humacyte SPAC, vax news you already know, and a new growth hormone therapy – approved!

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Music by Luke Goodson
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Life Science Today is your source for stories, insights, and trends across the life science industry. Expect weekly highlights about new technologies, pharmaceutical mergers and acquisitions, news about the moves of venture capital and private equity, and how the stock market responds to biotech IPOs. Life Science Today also explores trends around clinical research, including the evolving patterns that determine how drugs and therapies are developed and approved. It’s news, with a dash of perspective, focused on the life science industry.

Transcript

Introduction

Welcome to The Niche Podcast – Your weekly rundown of the biotech, pharma, clinical research, and life science industries. I’m your host, Dr. Noah Goodson. This week, the Cassava saga, Reify goes big… too big? Humacyte SPAC, vax news you already know, and a new growth hormone therapy – approved!


Disclaimer

The views expressed on The Niche Podcast are those of the host and guests. They do not necessarily reflect the opinions of any organizations or companies with which they are affiliated.


The Cassava Saga

Last week we talked about allegations of data manipulation and fraud surrounding Athira. But they are not the only ones making headlines. Cassava Sciences has been on their own journey dealing with allegations, but this voyage has been an odd one. Claims of fraud have arisen. But the charges come from a law firm who makes their money in fraud cases. Thomas Jordan of the firm Labaton Sucharow said that the publicly available data from Cassava suggests that if they were investigated then it would show data manipulation and fraud. Cassava responded Wednesday in what, I personally consider, a pretty spicy reply. They went point by point through Thomas Jordan’s assertions and addressed them as “fiction” compared to fact. If I’ve read this correctly, Thomas Jordan is saying that hey this data “looks” manipulated and is making a public stink. You’d think Cassava’s statement might have kept this a simple two-party situation. But in Cassava’s statement they cited one of their labs that conducted analysis, Quanterix. Quanterix quickly responded “we know nothing about this, we just ran blinded data experiments, we don’t know anything about this interpretation.” Cassava’s stock fell further on this news. But they quickly turned around and said yes, we are agreed. We analyzed you provided.

But here is where it get’s even more zesty. According to Cassava, the party making these allegations (represented by Thomas Jordan), admitted to holding a short position on Cassava. Meaning this party may benefit if their stocks plunge. The more you dig, the odder the situation becomes. The mechanism of protest chosen was not a news story but filing a “citizens petition” with the FDA, which typically only occurs on approved therapies, not those entering Phase III trials. Perhaps the most predictable outcome is a slew of lawyer fees. This extends beyond the Cassava/Thomas Jordan fight. For example, whoever is due to pay-out if Cassava shorts is certainly not going to go quietly into the dark if they think a powerplay caused the stock drop and not real data. Conversely, additional external analysis has  suggested there are potential concerns surrounding some of their data. This all means whoever is whistleblowing through the law firm may in fact have a good case. If the complaints to the FDA are reasonable and substantiated, I’d anticipate an investigation to follow. Despite all the fuss Cassava still has over $270M in the bank and burned just $5M last quarter giving them temporary runway to try and resolve this crisis.


The Mysterious Case of a $2.2B Valuation

Reify Health has raised a $220M Series C with a $2.2B valuation. They raised $30M last summer and have been developing a suite of solutions to accelerate trial recruitment. Clinical trial recruitment is a hugely hairy problem that plagues numerous trials. In fact, many sources state that the “number one reason clinical trials fail is because they fail to recruit.” And this may be true. But recruitment in clinical trials is not that simple of problem. On paper, you tell the right people and then get them into your study. But actually making this happen in the multi-stakeholder vicissitudes of real-life medical practice is just not going to be solved easily. Because “solving it” like so many problems that tech companies set out to solve involves “fixing” problems outside of the control of the company. For example, how participants engage with their physicians and which physicians are likely to promote a clinical trial cannot be changed through “innovation.”

My point is not that things in recruitment can’t get better. They definitely can; And I think Reify is trying to genuinely drive accelerated clinical trial recruitment by providing a digital platform for sites and sponsors to use for enrollment. From what I can see, the product itself is reasonably useful and they have signed up major players, including top biopharma companies. The concern for me is that I genuinely don’t understand where the $2.2B valuation is coming from. Especially considering the dilution ratio if they raised $220M. I have no inside knowledge about the value of their specific contracts. But I read a lot of stories every week and this one is a head-scratcher for me. It’s not that Reify’s platform isn’t cool. And it’s not that it won’t be used by companies. It’s just that imaging a “cost savings” that drives forward a company to have the kind of multi-billions valuation they’ll need for going public or selling defies logic. Yes, enabling clinical trial recruitment is valuable. Yes speeding it up could save enormous amounts of money but thinking a tech solution, no matter how widely used and sophisticated will realize these results in the real-world seems unlikely. In more basic terms, there is now a value realization problem for Reify. As always, I’m happy to be wrong here and I’ll gladly report to you folks if I am. But I think they would have been far better off with ½ or 1/4 of the valuation in the long-run. Investing money in health tech is very easy, getting the kind of growth seen in other tech sectors has not been done by anyone to date.


Humacyte Goes Public Through SPAC

Humactye has gone public through a SPAC raising $245M with a valuation just north of $1B. The Durham based company is working on a range of advanced vascular repair solutions, including late phase products for Trauma and Arteriovenous Access. Their human acellular vessels are a biodegradable mesh that can function as a scaffold for cells to grow on, before the mesh is degraded leaving behind a fully formed tissue. On top the this engineered surgical solutions, Humacyte is building a regenerative medicine product focused on type 1 diabetes. Their solution involves seeding pancreas Islet cells onto a meshwork and then implanting it as a tube along the vascular system. In this context the Islet cells can grow and begin functioning as a virtual pancreas to produce insulin. The combination of manufacturing, baseline technologies, and possible regenerative solutions gave private equity investors the confidence to give Humacyte the thumbs up last week.


Pfizer + Moderna On Track

Pfizer has received full FDA approval for their COVID19 vaccine, now sold as COMIRNATY. Following close on their heels, Moderna filed for full FDA approval last week. Full approvals in the US may increase the drivers of vaccination by allowing institutions to apply more pressure to individuals. However, the situation remains complex with large swaths of young people unvaccinated, and millions of school age children unable to be vaccinated. A number of states, particularly in the South are leading the charge on spreading COVID19. Other’s, like Hawaii, find themselves with overwhelmed medical systems as cases continue to rise. But with around 94.1-99.8% of cases occurring among the unvaccinated, stopping the systemic overload remains a major challenge.


SKYTROFA Approved

Ascendis Pharma has received FDA approval to treat children with inadequate secretions of endogenous growth hormone (GH) with a new once-weekly injection. Growth hormone deficiency (GHD) is classified as a rare disease but the patient burden on children suffering and their parents is meaningful. The current standard of care involves daily injections of GH. The new therapy, SKYTROFA, includes cartridges and an autoinjector for weekly injections. The therapy can also be stored at room temperature for up to 6 months, dramatically increasing the usability across different environments, for example when travelling or living in more rural areas. This is set to be priced at “premium responsible pricing.” With current therapies costing thousands per month, expect similar pricing strategy here. Ascendis will continue to pursue approvals to treat adults with GHD as well.


Closing Credits

Thanks for joining me on The Niche Podcast; your weekly summary of top news in the biotech, pharma clinical research, and life science industries. You can learn more at thenichepod.com or find us on your favorite podcast app. Like, comment, subscribe, and most of all share with your friends. If you like what you hear, please rate and review, it really helps us. Once again, I’m Dr. Noah Goodson, I’ll see you next week.