Journalism

The Cargo: Allozyne

Biologic therapeutics represent the vanguard of innovation. By 2006 they had captured a $30 billion dollar market with forecasted growth to $60 billion by the end of 2010. Although the creation and adoption of biologics has been rapid, the markets that they serve are still burgeoning with unmet medical need. We, a privately held and clinical stage biopharmaceutical company, have rapidly developed a number of protein therapeutics product candidates through its next generation protein engineering technology in order to serve unmet medical need in various autoimmune diseases and cancer.

Ka-Ching!

The Xconomy Headlines:

* Allozyne, Developer of Multiple Sclerosis Drug in Fewer Shots, Poised to Enter Clinical Trials 10/16/08

* Allozyne’s Next Drug, Made to Kill Two Birds With One Stone, Being Prepped for Clinic 11/16/10

* Allozyne Passes First Clinical Trial, Dreams Big About a Once-Monthly Multiple Sclerosis Drug 1/10/11

* Allozyne Acquires Poniard Pharmaceuticals, Finds Backdoor Route to NASDAQ 6/22/11

* Allozyne Looks to Rustle Up Interest on Wall Street With Backdoor IPO 7/13/11

* Allozyne, Poniard Scrap Plan to Merge Amid Investor Apathy 12/22/11

* Allozyne Raises More VC Cash, Looks to FDA Meeting After Poniard Deal Fizzles 12/23/11

One final headline by the Wall Street Journal: Poniard CEO, 4 Board Members Resign In Wake Of Merger Collapse

Xconomy missed that story.

The unfettered enthusiasm remains a mystery. The journalistic approach to the story is non-existent. A balance comes in the comment section of a few articles. A reader who goes by the moniker Nanostring added a few points on the Poniard deal that the article does not mention:

1. Based on today’s price of PARD, the merger values Allozyne @ ~$20 M ($11M*65/35).
http://finance.yahoo.com/q?s=PARD&ql=1
That is: they took valuable technology from Caltech + $43M in investor money and ended up with $20M in value. You do the math.

2. Even that $20M may be too rich, considering that PARD got immediately hit by two lawsuits for agreeing to the terms of the merger.
http://yhoo.it/qbHfKv
http://yhoo.it/mOWjQe

3. As of now PARD shareholders have twice rejected the reverse stock-split, which is a prerequisite to the merger:
http://biz.yahoo.com/e/110725/pard8-k.html (second graph)

Nanostring sounds like an interested party with ties closer to the money than the science. He was correct about the market value falling short. He is no fan of the Xconomy cheerleading.

Will this FAIL be covered at Xconomy? What happens next? Will we hear again from OVP’s Carl on how proud he is with Allozyne, now that PARD shareholders have flipped a middle finger to this merger? Why are comments disabled on the other Xconomy article?

Unfortunately, (as I have complained to Luke and Buderi on numerous occasions), Xconomy again wants to be more of a PR shop for the local VCs rather than a real news-reporting blog with journalistic integrity…

Keeping the positive spin on the disastrous management of Allozyne is worthy of journalistic coverage all by itself. Meena Chhabra is very attractive. Yet she was unable to attract the kind of attention needed among the geniuses of Wall Street. While she continues to go unscathed in Xconomy and among her local peers, her counterparts at Poniard suffered a different fate.

Will Allozyne survive? With plans to skip phase II trials and sign up only 700 people in a phase III, funded by Allozyne alone, all carried out by a management team that orchestrated the Poniard fiasco... we think this plane won't land. And all of this for the hope of a longer lasting form of a drug already on the market.

Will Xconomy cheer leading continue, leaving in the good and leaving out the bad? Unfortunately we think they will. They are a part of this Cargo Cult.