FierceBiotech’s rotten tomatoes and ripening fruit 2017

rotten tomatoes
Find out why Accera Pharmaceuticals, OncoMed and Sanofi all made our list this year. (JohnnyMrNinja/CC BY-SA 2.0)

A year ago, FierceBiotech started a new segment called rotten tomatoes, a special feature designed to look over the past 12 months and pluck out the rotting fruit across biopharma. The idea was to spotlight companies that have fallen short of the tough ethical and scientific demands of this industry.

This year we’re at it again, with a bit of a twist: We’re also looking at fruit that's come back to ripen once again—namely some companies that topped the rotten leaderboard in 2016 but came back in 2017 smelling of roses. We're willing to elevate, as well as denigrate, and that’s exactly what we have done with two of last year’s winners.

Ben Adams Editor's Corner Image

There was, in fact, a dearth of rotten tomatoes over the last year—relative to 2016, at least. We'll have to wait a little longer to see whether 2016 was simply a particularly bad year, but we've already identified early contenders for 2018. (See you next year, Axovant.)

It may seem that we just poke fun at suffering companies, but "innovate or die" has a literal meaning in this industry: This year, on the rotten side, we have a major Big Pharma that sold a vaccine for children that may, according to reports, have worsened their disease; a failed Alzheimer’s drug that won’t give up the ghost, despite a very strange method of action; a biotech that saw a clean sweep of trial failures, slashed staff, then lost its chair, president and CEO; biotech executives who lied about how much money their company was making; and a founder of a major life sciences VC firm who allegedly sexually harassed female employees, particularly executive assistants.

But we have seen a major turnaround for two of last year’s rotten tomatoes: one that came back from the brink still fighting, and another that blew the cobwebs off its M&A team and creaked open its sizable wallet to make a long-awaited deal.

All these things matter to patients, to the healthcare system, to investors and to the staffers at these companies. As someone who lost two family members last year, one to cancer and one to Alzheimer’s, it’s a painful reminder of how badly we need good, honest, hardworking biotech companies that innovate, so patients don’t have to die before their time.

I hope you enjoy this year’s list; if you have any comments, contenders I missed (either rotten or ripe), or early entries for 2018, send me a message. — Ben Adams (email | Twitter)

FierceBiotech’s rotten tomatoes and ripening fruit 2017:

Accera Pharmaceuticals
Ripening fruit: Gilead
Ripening fruit: Juno Therapeutics
OrbiMed and Sam Isaly
Osiris Therapeutics


Accera Pharmaceuticals bills itself as “a new hope for Alzheimer’s,” citing an urgent need for approaches that go beyond traditional targets for the disease. So, instead of attacking amyloid plaques or tau tangles in the brain, Accera is taking aim at an Alzheimer’s-linked slowdown in the brain’s glucose metabolism.

Its weapon?

Coconut oil.

Well, more precisely, its lead candidate, AC-1204, is a form of caprylic triglyceride, a fat made of coconut oil and glyceride.

Coconut oil is the latest “superfood” that’s said to have a host of health benefits, such as lowering cholesterol, but there's a dearth of peer-reviewed research to back up these claims—including, as Accera is finding, its utility in treating Alzheimer’s disease.

The company’s thesis is that because the Alzheimer’s brain increasingly cannot derive energy from glucose, providing an alternate source of energy should jump-start it. The candidate, AC-1204, is designed to be converted into ketones by the liver and then travel to the brain to provide energy. There, it “may help restore” neuronal metabolism and thus improve cognition, the company says.

In a 90-day, double-blind, placebo-controlled phase 2b trial, treatment with AC-1204 improved cognitive test scores in people who did not have the APoE4 gene, which is linked with an increased chance of developing Alzheimer’s.

Bolstered by these data, Accera took the candidate into phase 3, where it flopped. More than 400 patients were treated daily with either AC-1204 or placebo, but the treatment arm showed no difference after 26 weeks.

The company refused to let the setback scupper the program, chalking the failure up to a change in the drug’s formulation between phase 2 and phase 3, and spinning the news as a positive: "We are pleased that analysis of the data has provided support for the treatment hypothesis and valuable information for the future development of the program," said Michael Gold, M.D., Accera's senior medical adviser.

At the time, Accera said it was confident that another new formulation would be the ticket, and that it is finalizing its clinical development strategy and will liaise with the FDA on its next steps.

This won’t be Accera’s first go-around with the FDA, however. The company started life as a medical food company, marketing Axona, a powdered shake for people with Alzheimer’s.

In 2013, the FDA hit Accera with a warning letter saying it mislabeled Axona as a medical food on its website and elsewhere, as there are "no distinctive nutritional requirements or unique nutrient needs for individuals with mild to moderate Alzheimer's disease.” The agency said Axona should be regulated and marketed as a drug instead, and it ordered a response detailing how the company planned to address its violations.

It appears that Axona is still on the market, with some tweaks to the language on its website. But a year and a half after the FDA’s warning, in 2015, Accera issued a press release saying it would “pivot” from medical foods to pharmaceuticals in the hopes of creating a first-in-class drug to treat Alzheimer’s.

What puts Accera in Rotten Tomatoes territory is passing its phase 3 bust off as a positive and persisting in spite of evidence that its drug does not work. The company has raised more than $150 million from the likes of Nestlé—money that might be better spent on other promising, but high-risk approaches to Alzheimer’s that haven’t been resoundingly debunked.

RELATED: Roivant CEO: Yes, we failed in Alzheimer’s, but we’re not giving up

The company’s also pulling a Theranos, which made this list last year and tried to prop up its image with a brand-new scientific advisory board. Two months after its phase 3 bust, Accera tried to rescue its sinking reputation by appointing a neuroscience veteran, Judith Walker, M.D., as its chief medical officer.

Walker, who has served stints at QuintilesIMS, Teva and Merck Serono, has her work cut out for her—she has been tasked with shepherding AC-1204 into the final stage of development. Whether she will succeed where Accera has hitherto failed has yet to be seen, but she’s bet her career on it: “Accera has one of the few drugs in late-stage development for Alzheimer's disease which addresses a differentiated and well-validated target. I am delighted to be joining Accera at this exciting time in the program.” — Amirah Al Idrus


Ripening fruit: Gilead

Gilead did a deal! Gilead. Did. A. Deal. And after many, many months and years of investors and analysts moaning about Gilead needing to brush the cobwebs off its M&A team and repeat the feat of its impressive Pharmasset deal, it finally got out its checkbook.

And there were quite a few zeros: just shy of $12 billion for Kite Pharma, a leading CAR-T biotech, which at the time was trading punches with big boy Novartis to launch a new way of tackling blood cancers.

This was in some ways a fairly “safe” deal; $12 billion is midsize, and a few months after Gilead signed the papers, Kite (now Gilead) got FDA approval for the second-to-market CAR-T med in the form of Yescarta (axicabtagene ciloleucel). The cell therapy won approval to treat adults with relapsed or refractory large B-cell lymphoma, including aggressive, non-Hodgkin lymphoma, who have failed two or more traditional treatments.

RELATED: Move over, Novartis: Kite and Gilead break into CAR-T market with early axi-cel nod

When Gilead was a “winner” among the Rotten Tomatoes last year, we said it should do a deal not just to appease investors/analysts but also to help shore up its pretty weak cancer pipeline; there was no better way of doing that than with the latest cutting-edge cancer tech in the form of this complex cell therapy.

And hey, the idea proved so popular that Celgene did the same thing with Kite's rival biotech Juno—which has its own CAR-T therapy a little further down the line (but also with a little more baggage)—in a $9 billion deal struck in January.  

RELATED: Celgene confirms $9B Juno buyout, sees $3B sales for JCAR017

There are caveats for Gilead: The price tag is huge; trial data has covered relatively few patients; manufacturing is not easy; safety issues still remain a concern; and, with any new therapy, longevity of treatment will be needed to see just how well it works in the real world. But Gilead made a pretty good bet, especially if CAR-T in the next decade becomes the oncologists’ choice across most blood cancers.

There’s scope for many Yescarta indications in blood, but breaking into solid tumors will likely prove far more difficult. 

In 2011, Gilead paid a similar amount for a new way of treating hep C, and that paid off in the mid- to short-term very nicely—if anything, it did too well, as it made tens of billions its first few years, then lost sales as high cure rates shrank the number of patients needing treatment. Analysts at Jefferies did a deep dive into Gilead’s CAR-T demand back in January, asking: "What's current patient demand, and how long is the queue?"

“Our initial checks suggest that patient 'demand' is high for Yescarta—and docs have queues of patients who could be treated. There are 22 centers now certified by Gilead to administer Yescarta and an estimated addressable U.S. population of around 7,000 to 10,000 annually.

“However, given the nuances of CAR-T therapy, there is debate as to whether the high level of patient demand is actually translating to patients being treated and at what cadence is reasonable over the next six to 12 months as reimbursement clarity may need to clear up for these centers.”

But in the meantime, the Kite deal has given Gilead the boost it needed. Its shares were in the doldrums last summer, hovering around the mid-60s; in the wake of the deal, it was trading around $81 a share by February, giving Gilead a market cap of $106 billion.

Overall, Jefferies sees Gilead as carving out a turnaround: “Gilead has had it tough since 2015, but we believe the worst is generally moving behind them,” says analyst Michael Yee.

“HCV is less than 20% of the company and buyside expectations and sentiment already low," Yee noted. "We see better days ahead: after three years of decline, consensus EPS regrows for 2020-plus and we want to own Gilead coming out of the decline and back into the recovery period.” — Ben Adams


Ripening fruit: Juno Therapeutics

Last year, we were pretty harsh on Juno Therapeutics, a winner of the inaugural Rotten Tomatoes award, after a group of young people died in the tests for a new CAR-T medicine—a therapy that was later ditched, although too late for some.

Deaths can happen in experimental science, of course, whether from the disease itself or from the drugs trying to treat it, but when the first round of deaths happened on Juno’s watch, the company appeared to blame other factors for the fatalities and was given a quick turnaround on an FDA halt. A few months later, several more patients died, and with a sense of inevitability, the drug itself was later killed off.

Juno had been up there with Novartis and Kite Pharma in the fight to get a first CAR-T med to approval, but the biotech was hit hard by those deaths—and the decision to abandon its first-in-line drug. It had to reach further back in its pipeline for a new CAR-T that works differently from the now-ditched JCAR015. Its stock took a big hit, and some thought that might be the end for it.

But 2017 saw Juno become the phoenix from flames, rising up with a new drug, JCAR017, that has since come up with some encouraging new data. Juno kept going, didn’t lose focus on its goal, and then, in January 2018, won a $9 billion buyout from long-term partner Celgene, with plans for its first approval from next year.

Many biotechs could have shriveled up and shuffled away after these fatalities, after the approvals from its rivals, and the hits Juno took from the media. But Juno should be commended for its ability to keep going, gain that buyout, and, hopefully, create a better, safer drug for blood cancer patients. — Ben Adams



OncoMed has probably been hit by more woe in 2017 than nearly any other biotech, a situation that, at the very start of 2018, culminated with the exit of its chairman, president and CEO Paul Hastings.

Why? Well, much of its trouble came crashing down in April last year. At the start of the month, the biotech revealed that its Celgene-partnered lead asset demcizumab flunked a phase 2 pancreatic cancer trial, and then that German pharma Bayer had stepped away from two drugs, triggering a 40% drop in its stock price.

A week later, OncoMed shares tumbled again with the failure of a phase 2 trial for tarextumab (its anti-Notch2/3 med), in combination with etoposide and chemo in first-line patients with small cell lung cancer. The drug missed its primary endpoint of progression-free survival, as well as its secondary endpoint of overall survival, coupled with a failure to see biomarkers showing a Notch pathway gene activation.

Then, at the end of the month, with more than a touch of inevitability, it slashed its workforce by around half, while rejigging its R&D to “focus internal efforts on the advancement of three clinical-stage programs to key milestones and continued immuno-oncology drug discovery and development, while seeking to partner select pipeline assets.”

Hastings took a medical leave in September and then resigned his leadership posts on Jan. 4 this year to pursue “new career opportunities,” just two months after coming back from that leave.

The biotech’s shares were worth around $10.50 apiece leading up to April, but after the trial woes, its loss of a partner and the staff cull, it's now hovering above $2 a share, with an $85 million market cap.

To see a series of drugs fail, Bayer walk away from two drugs, and drastic staff cutbacks—all the while rethinking strategy—and then lose your CEO in the midst of such calamity? That's about as rotten a year as it gets. — Ben Adams


OrbiMed and Sam Isaly

OrbiMed is one of the biggest backers of life science companies in the world with $14 billion in asset management, and it has ties across biopharma with big investments in multiple disease areas.

So the VC’s founder, Sam Isaly, was a major name in the VC field—but he abruptly stepped down last year. His departure came with a press release praising his work, with a quote from the man himself.

“I am extremely proud of what my distinguished partners and I have accomplished at OrbiMed and the difference we have made in the lives of patients worldwide," Isaly said in the statement. "OrbiMed is a strong and vibrant company positioned for continued growth, and this is a good time for me to pass the baton to the next generation of leaders.”

He’s in his early 70s, so you might conclude he decided to retire. That is, of course, if you hadn’t read the serious allegations told to STAT news from five women who accused Isaly of wrongful behavior.

They told STAT’s Damian Garde that between 2000 and 2015, Isaly had “regularly sexually harassed OrbiMed’s female employees, particularly executive assistants. Two of the former employees said he repeatedly exposed female colleagues to pornography in the office. One said Isaly played a prank on her with a sex toy.”

Yanping Ren, who worked part-time at OrbiMed for 18 months as an intern, said Isaly routinely made “vulgar and demeaning remarks to women in the workplace, including commenting on their bodies.”

“It was so normal in the company,” Ren told Garde. “It was like a fact of life that everyone had to accept. Sam just did what he could get away with.”

Isaly denied the claims and told STAT he had no plans to retire. A few days after the story broke, however, he was gone, though the firm's announcement made no mention of the media coverage, the allegations—indeed, gave no reason at all why he left.

The allegations haven't gone to court, and Isaly has continued to deny them, but he and OrbiMed gain a Rotten Tomato because of the way the accusations were handled. They surfaced amid the so-called #MeToo movement, with women across the world taking to Twitter and other social media to talk openly about the sort of harassment they have encountered. That movement, of course, was touched off by revelations about Harvey Weinstein, a former big Hollywood director who faced allegations of serious sexual impropriety spanning years.   

The ensuing wave of sexual harassment allegations, particularly in Hollywood and the media, resulted in quick acknowledgment at those companies—and quick disciplinary action. It's hard to believe it's a coincidence Isaly left the same week such allegations surfaced, but OrbiMed said nothing to address them.

The court of public opinion is no substitute for a real court, but to redeem itself, OrbiMed needs to investigate the allegations, issue apologies if they prove accurate, and learn some serious lessons for the future. If sexual harassment was indeed “just a fact of life” at the firm, then OrbiMed needs to clean up a toxic culture, and fast.

On Twitter, Amit Jolly said after Isaly announced his departure: “Proud of my wife, @ypr321 [Yanping Ren], offering on the record sexual harassment allegations against @OrbiMed’s Sam Isaly, leading to his retirement. She was an intern and thought this is the norm. Very proud of the people who spoke up. Exc reporting, @statnews @damiangarde Via Yanping: #MeToo.” — Ben Adams


Osiris Therapeutics

Osiris is an ominous name in any industry, but in biotech, having the god of the dead as your moniker is perhaps a little strange.

But, as with many ancient deities, Osiris also means its opposite: the god of resurrection and fertility. For Osiris Therapeutics, however, after last year’s exploits, it should have renamed itself Plutus.

Why? Well, former CFO Philip Jacoby, as well as three other executives—former CEO Lode Debrabandere, former VP of finance Gregory Law and former CBO Bobby Montgomery from the Maryland-based regenerative medicine company—were found guilty of “prioritizing revenue growth over lawful accounting and misleading investors in the process [and] routinely overstated company performance and issued fraudulent financial statements for a period of nearly two years.”

The executives were said by the SEC to have lied to auditors about how much the company was making, inflating the number by just over $1 million in 2015. That overstatement helped build confidence in its stock, albeit artificially.

The revenue issue centers on sales of its Ovation bone matrix product. The product had actually been given to a distributor on consignment rather than sold. The fraud was also said to include reporting inflated sale prices for products and reporting cash from sales before agreements were penned.

Osiris agreed last year to settle the charges, although without admitting or denying the allegations, and was hit with a $1.5 million penalty. Jacoby pleaded guilty in November and was facing jail time, but in February he was spared prison and slapped with a $10,000 fine.

Jacoby could have seen 10 months behind bars and a fine of up to $5 million, but poor health and a long-standing career appeared to help sway the judge toward leniency.

When times were good for the small biotech in the summer of 2015—and its numbers inflated—it was trading at around $22 a share. In November last year, it fell under $5. Shares have since climbed to $9, giving the company a market cap of around $300 million by the end of February. 

Julie Lutz, director of the SEC’s Denver Regional Office, summed it up neatly last November: “Corporate cultures cannot be so fixated on higher revenues that they use illegal accounting gimmicks to meet the financial numbers they desire.” — Ben Adams

Sanofi Pasteur HQ
(Sanofi/Vincent Moncorgé)


Big Pharma companies have spent many years fighting a series of ethical and legal allegations over hiking prices willy-nilly, withholding medicines from certain countries, burying unflattering trial data, trying to block generics and so on.

One of the big conspiracy theories has always centered on vaccines. Scaremongers have alleged that pharma companies put dangerous mercury in their shots; they've said vaccines don't work, aren't safe, cause autism, and so on ad nauseam. Vaccines are lifesavers, but a small and often very vocal minority can still cause tremors of worry across larger segments of the population.

The industry as a whole has been trying to turn a corner. Bad behavior hasn't gone away completely, but out in the world, and internally, these companies are trying to put the bad old days past them. And when it comes to vaccines, there has been a strong effort, bolstered by FDA Commissioner Scott Gottlieb, M.D., to put vaccines in the right light as remedies that can prevent death and disease.

RELATED: Trump's FDA pick Gottlieb calls vaccine, autism theories 'thoroughly debunked'

But last year, Sanofi Pasteur did something that brought back a lot of that anger and resentment.

The story revolves around Dengvaxia, the world’s first vaccine against dengue, a mosquito-borne tropical disease that kills about 20,000 people a year and infects hundreds of millions. In November last year, Sanofi announced that this shot could in fact boost the risk of severe disease when given to those who'd never been exposed to the virus before. This caused an outcry in the Philippines, where the vaccine had been given to around 800,000 children.

An investigation into the vaccine found a few weeks back that Dengvaxia “may have been connected to the deaths of three” who got the shot, according to a report from a Philippine Health Ministry panel convened to assess the deaths of 14 children.

“Three cases were found to have causal association. They died of dengue even (though) they were given Dengvaxia. Two of them may have died because of vaccine failure,” Health Undersecretary Enrique Domingo told a news conference, as quoted by Reuters.

Now, the Department of Health in the Philippines is, according to local reports, set to file a civil case against the French pharma’s vaccine arm for its refusal to comply with the government’s demand for a full refund over sales of Dengvaxia, on which it spent around $69 million.

Sanofi, however, says the vaccine is safe. “In Dengvaxia clinical trials conducted over more than a decade and the over one million doses of the vaccine administered, no deaths related to the vaccine have been reported to us,” the company said in a statement.

Meanwhile, pediatrician and Philippines panel member Juliet Sio-Aguilar, from the University of the Philippines-Philippine General Hospital, said the team looking at the vaccine was recommending “further studies,” as it was difficult to directly connect the three deaths to Dengvaxia.

But while Sanofi's new analysis from six years of clinical data did show that Dengvaxia provides “persistent protective benefit against dengue fever in those who had prior infection,” it adds that, for those not previously infected, more cases of severe disease could occur following vaccination, Sanofi said.

The World Health Organization (which now has a Q&A sheet on the vaccine and is reviewing its safety) in fact said all the way back in mid-2016 in a report (PDF) on the disease, as well as Sanofi’s vaccine, that “[v]accination may be ineffective or may theoretically even increase the future risk of hospitalized or severe dengue illness in those who are seronegative at the time of first vaccination regardless of age."

Citing a regulatory filing in Singapore, a Philippine FDA official this month accused the company of knowing of the threat before disclosing its analysis in November 2017, citing the WHO report. A company executive has since hit back, saying the document outlined potential or "theoretical" risks.

More data will be needed to determine whether deaths occurred as a direct result, but companies need to be beyond careful when it comes to safety, especially with vaccines—and even more so when given to children.

There is no need to give any ammunition to anti-vaxxers. While Sanofi is trying to defend its business and its drug, many of its statements last year have felt cold and uncaring about the potential harm its drug could and may have caused. Investigations are still ongoing, but Sanofi should be honest and open at every step. — Ben Adams