Sahm Adrangi’s reputation for shorting companies producing pharmaceuticals that he doesn’t think are as effective as their testing data states. While on initial glance these medications may seem like game changers for the diseases they were created to treat, further research performed by the team at Kerrisdale Capital shows the data portrayed isn’t honest and sometimes completely inaccurate.
This has been the case for companies such as Zafgen, Sage Therapeutics, Bavarian Nordic, and Prothena among a few others. Now, only time will tell if it’s true for Sahm Adrangi’s newest biotech target Proteostasis. Proteostasis is based in Cambridge, Massachusetts and has a medication designed to treat cystic fibrosis that is currently still being tested.
The preliminary results from the testing appeared to be quite impressive, but Sahm Adrangi didn’t think something about the information was right. He and his company, Kerrisdale Capital, decided to look into the medication themselves and performed extensive research to get a better idea of what the data they released really meant. While it is true that the group that received the medication did significantly better than the placebo group overall, a further look showed that the placebo group fared significantly worse than patients with the disease usually did. He believes that this fact allowed the medication to appear far more effective than it actually is.
The placebo group in the study only consisted of 4 people. Sahm Adrangi does not believe that this size was large enough to properly study the effects of the medication. If the placebo group had the average lung function of patients with cystic fibrosis, the medication would have shown to only increase lung function by around 1%.
The medication currently in testing has been fast-tracked for approval as there aren’t many effective treatments for cystic fibrosis. Despite these special allowances, Kerrisdale Capital doesn’t believe there is much chance that the cystic fibrosis drug will be approved once the results from further testing are released to the public. Sahm Adrangi has been quite open with the public about his recent short as well as the shorts that he has made in the past.