[Dr. KSS writes about medicine and biotech stocks for the Irregulars. He has agreed to our trade restrictions, chooses his own topics, and his words and opinions are his own. You can see all his past articles and recent comments here.]
The State of Things is a classy 1982 Wim Wenders film in which a film crew, shooting in Portugal, finds itself in a purgatorial limbo. Out of cash and, worse, out of film stock, its next move is uncertain, and there’s little but to sit, wait, and ruminate.
It’s the kind of plight in which biotech investors such as us now find ourselves: up days are few (good news provokes sell-offs as promptly as bad news does), our best long theses have been hammered by unforeseens (Esperion ($ESPR) is in dutch with the school principal again, but without doing anything wrong!), and some of the best disease-treating technology mankind has ever seen goes languishing for want of merger-and-acquisitions virility by majors. Others are stymied by an FDA sandbagging any evidence of imperfection as an affectation meant for us to sense it is heartless to pharma, revealing the agency’s own imperfections.
The ill-at-ease feeling is intensified by the fact that the FDA regime is ruling with a “gotcha” mentality. In Cambodia, Pol Pot made the Killing Fields (a place I’ve visited) a place of extreme horror by telling Khmer Rouge soldiers to select one victim at random from the masses every hour for cudgeling and disemboweling; this is a heavy-handed analogy for methods of keeping people in self-destructive fright. A close friend whose native language isn’t English speaks of such stressors by saying, “they nerve me.” The FDA is now “nerving” biotechs because every nth supplication to the FDA gets snagged and stiffarmed owing to an undotted “i.” The FDA is trying to erase any lingering question of friendliness to biotech because that’s something of which FDA Commissioner Robert Califf, MD, has been accused in his prior academic life, and to effect this has impaled TransEnterix ($TRXC), Zafgen ($ZFGN), Juno ($JUNO), and Regulus ($RGLS).
To further melt the biotech mousse, we are seeing biotech managers, supposedly our agents and advocates, acting on whim, on caprice, spazzing like Tourette’s sufferers, concealing price-sensitive information and doing about-face pirouettes on agendas. We’re in biotech koyaanisqatsi, a space in pan-SNAFU in the literal military meaning of the acronym. The Yeatsian center cannot hold ...