
A billion-dollar pharma startup that Silicon Valley has missed - iamjeff
https://techcrunch.com/2017/01/06/this-millennial-wants-to-build-the-berkshire-hathaway-of-biopharmaceutical-companies-can-he-pull-it-off/?ncid=rss
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hprotagonist
See a rather scathing rebuttal here:
[http://blogs.sciencemag.org/pipeline/archives/2017/01/11/121...](http://blogs.sciencemag.org/pipeline/archives/2017/01/11/12110)

>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.

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andrewtbham
If you're confident this is true... why not short the stock? if correct, you
could make a lot of money.

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in_cahoots
"The market can remain irrational longer than you can remain solvent." The
quote itself may be apocryphal, but the meaning is certainly true.

~~~
danieltillett
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.

~~~
jimlawruk
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.

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dnautics
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.

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arikr
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

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dnautics
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)

~~~
refurb
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.

~~~
dnautics
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").

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rpedela
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.

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jamesash
A more skeptical take.
[http://blogs.sciencemag.org/pipeline/archives/2017/01/11/121...](http://blogs.sciencemag.org/pipeline/archives/2017/01/11/12110)

Tl;dr Alzheimer's is hard to drug, and the approach this company is trying has
been tried before.

~~~
kgwgk
See also [https://www.thestreet.com/story/13178707/1/inside-the-
hedge-...](https://www.thestreet.com/story/13178707/1/inside-the-hedge-fund-
club-pitching-a-new-alzheimers-drug-ipo.html)

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!!!!"

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55555
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.

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shiven
Too much hype, too little proof. Until then, this is pure shit, nothing more.

SV BS spreading from software to Biotech/Pharma.

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cylinder
Scam senses tingling. Once again.

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ainiriand
Couldn't agree more. A billion-dollar pharma with nothing in the market?
Nothing to be marketed in 2017, possibly not even in 2018? Hmmm... I've seen
this before...

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mbesto
> Whether the scheme will work longer term isn’t clear

>
> [https://www.google.com/finance?q=NYSE%3AAXON&fstype=ii&ei=2U...](https://www.google.com/finance?q=NYSE%3AAXON&fstype=ii&ei=2U94WJmbHoHRjAH27rbYBA)

Wait, what? How is this a startup and how does this have anything to do with
SV...

TC is _really_ reaching here...

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zebraflask
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.

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doomlaser
Abandoned drug speculation? The business model looks like it's in a similar
vein to patent troll

