G1945V asked some questions regarding Bioasis being on the record about whether xB3 works or not. This response is very long and is intended as a record of the things it discusses. I make no apologies for its length. It could have been much longer, as you will see later. (Also, it is presented in a larger bold font for reasons of user accessibility.)
G1945 asked, “JD, am I correct to assume that the CEO's responses to questions you posed to them are based on pre-clinical data? If that is the case you have them on record on that basis, which may make their responses correct.”
I was always been somewhat concerned and even alarmed by some of Rob Hutchison’s words, actions and inactions. My concerns were sufficient that I began to question whether there were some undisclosed problems with XB3, then called Transcend. I was especially alarmed in 2012 when I wrote a post calling for the extraction of what I called the “hook” from the p97 (melanotransferrin) molecule, the “hook” that attached to the receptor. I didn’t know the word “peptide” at the time. I was told through a third party (pmrider) that RH didn’t want me to talk about that. Of course, I immediately realized that Bioasis was already working on the peptide, or “hook.” (I was also told that RH was telling some people that my Stockhouse posts were so accurate that it was like I was sitting in on Bioasis management and board meetings. So much for not knowing what I was talking about.)
The peptide was announced in 2014. Sometime before that I realized that I really had to hit the books. I was embarrassed that I has missed the whole fusion protein vs conjugate thing, a concern that occurred to me because of the peptide question.
I was also upset that RH could lead investors to think from 2008 until 2014 that Bioasis had a viable and commercially valuable technology when the truth was that Bioasis did not have such a technology until the peptide was developed. I felt that Bioasis did not provide full disclosure or an honest description to investors of Bioasis’s technology and prospects. So I began to doubt RH’s veracity.
That’s when I felt the need to get RH and Bioasis on the record with some unequivocal statements and answers so that I (and others) could have some confidence in the technology and Bioasis’s prospects. It was and remains a given that if the technology works then there is huge value to the technology.
So after the peptide was announced in 2014 and after I joined Bioasis that same year, I felt that Bioasis really needed to get some preclinical work done. I asked RH about that and he answered with the rhetorical question, paraphrased, why would Bioasis risk failure when our partners and licensees can take those risks?
That wasn’t very comforting. Was RH afraid that Transcendpep (MTfp, now xB3) would fail? Did he have real reasons for worrying about that? So I started asking the questions. I knew better than to ask whether xB3 worked because the definitive answer to that is impossible to know unless and until an xB3 drug has gone through human clinical trials and has been approved by the FDA for use in humans.
But I could ask about whether xB3 had ever shown any problems, whether it had ever failed and whether any partners or potential partners perceived there to be problems, anything that could prevent deals from getting done. Deals were not getting done and Bioasis was not doing any real preclinical work. What the hell was going on after almost 10 years?
So my intention was always to get Bioasis on the record, to tie the CEO and BoD to unequivocal statements denying there were problems with xB3. From 2014 until 2017, and into 2018, I wrote most everything Bioasis put out, including press releases and the text of the new website. At the time, Bioasis had no real public statement outlining a business plan. I wrote new text for the website that included new elements of a business plan. RH (and maybe the BoD) approved my text and business plan elements and they were put on the new website. (I fought to keep those awful “space fantasy” graphics off of the site but I lost that argument.)
I was assured by RH, no matter how I asked the questions, that there were no problems with xB3. xB3 worked as expected in all studies. Then why can’t we get deals done? He wouldn’t answer that. He kept saying privately and publicly that he expects to get deals done, he expects 3 this year, two by Christmas, etc. etc. There was NEVER any hint of a problem, real or perceived, at any time.
But RH wasn’t getting deals done. He realized he needed help and he brought in Mark Day. I continued to ask the questions, “Are there any real or perceived problems with xB3?” I used all sorts of constructs - direct questions, oblique questions, obscure questions, obscure comments, questions to Mei Mei, Catherine (London) Day, Caroline Hill, questions and comments in management science meetings I attended. I could never ferret out a negative thought or comment about xB3. Not one.
And all of the research studies continued to indicate that xB3 was extremely capable, could deliver almost anything across the BBB in quantities that surpassed all other technologies. The table of comparisons between xB3 and competing technologies (Denali, Angiochem, Armagen, etc) was a fixture on the Bioasis corporate presentation for years, until Rathjen, likely with LT, began to downplay xB3 for other reasons.
About the types of studies that Bioasis depended upon for its assessments of xB3, and germane to G1945V’s question, I would think most of them were considered to be research studies. However, some xB3-001 studies were considered preclinical insofar as they were used in Bioasis’s pre-IND submission to the FDA, a submission prepared by Caroline Hill that the FDA considered to be compelling enough for them to encourage Bioasis to make application for FDA fast-track consideration in the future. The FDA liked what they saw about xB3.
In short, Bioasis has been on the record with nothing but success with xB3, and not a hint of problems. My objective with my questions was to get Bioasis to unequivocally deny problems with xB3. They have done so and I have reported their responses a number of times over the years.
The question about whether xB3 works is different from the questions about whether it doesn’t work. No problems means no problems. Does it work gets an answer something like, “It’s worked in every study we or anybody else has done. But there’s still a way to go.”
Some people, the trolls, employ the non sequitur that, because there are problems with deals and partners, then that must mean that xB3 doesn’t work. It could mean that but it’s certainly not definitive. I don’t think anybody would want to deal with Rathjen over the last couple of years. She seemed to be talking out of both sides of her mouth, downplaying xB3 and yet saying it works, and at the same time working with Ladenburg Thalmann and The Gang to sell Bioasis in a deal that did not, at all, reflect the true value of a capable xB3. That must have caused concern among pharma executives.
I suspect that some partners and potential partners were and remain concerned. I don’t think these companies would do deals with Rathjen. Further, I think it possible that current partners would not and will not move to advanced elements of R&D agreements with Bioasis until the Bioasis situation has been resolved. That’s just good business.
There’s also the payload situation. Simply put, an xB3 drug, if it’s going to fail, is almost certainly going to fail because of the payload, not because of xB3. xB3 simply delivers the drug. If xB3 delivered the payload to the brain and if the drug failed, xB3 may be about as likely to be the cause of the failure as a syringe is the cause of the failure of an injected drug. The payload either succeeds or fails to treat its intended disease. All xB3 does is to put it in the position to succeed or fail.
I have raised questions about off-target delivery of payloads to the CNS due to the concentration of LRP-1 receptors on normal brain cells. My intention was to cause concern among investors and that Rathjen would be driven to address my LRP-1 questions, to put it on the record. Apparently she did address them with Graeme, who, I am told, passed the word on to shareholders with whom he spoke. No problems with off-target delivery because of LRP-1. I have never considered off-target delivery to be an xB3-killer. As I have written before, many drugs such as chemotherapies cause collateral damage, but they are nevertheless used because their benefits outweigh their problems.
There are also situations where R&D and clinical results from other pharmas may cause deep concerns about the potential efficacy and value of a Bioasis partner’s xB3 drug. I believe it is possible that one of Bioasis’s partners has dropped its xB3 program because there are indications that the payload may not be the right approach to the disease. There is one situation I know of like this but my NDA prevents me from discussing it. I have discussed situations like this on a number of previous occasions.
Some companies, and it’s been going around, unsubstantiated, that Chiesi may be one, have had difficulty creating fusion proteins with xB3. It’s difficult to genetically manipulate any organism to produce man-made proteins. The are some very specific requirements for the positioning of xB3 on a protein molecule, terminus considerations, linkers, protein folding, all sorts of stuff beyond my knowledge. It’s doable but it’s not easy. There was one company, a big one that I can’t discuss, that failed miserably to do it. They brought their half-baked results back to Bioasis, saying that Bioasis’s baby was ugly. Bioasis, in that meeting, could see what the company had done, and not done. There was nothing wrong with xB3. The problem lay with the other company, demonstrably.
Because scientists and genetic engineers can make genetic engineering and other methodology mistakes with xB3, I have stated in the past that Bioasis, upon receiving an account of such problems from a partner or collaborator, cannot ever accept those third party results at face value. You can’t shut Bioasis down or discard xB3 when somebody reports a problem. Bioasis has to investigate the problem and if they can duplicate it or otherwise come to the conclusion that a fix is needed, then they have to fix it. If a technology-killing problem arose, with no fix possible, then that is material and must be reported.
For instance, Bioasis mentioned to some people, including me, that WuXi ran into some sort of situation when they were working on the xB3-001 fusion protein. Apparently it was an easy fix but the fix may have been, as I understood it, sufficiently important to be included in a tweak to one or more Bioasis’s patents. I never asked anything more about it because if I had received more detailed information directly from the company then I likely wouldn’t be able to discuss it for confidentiality reasons. So I don’t have any more detail than that but it is illustrative of the process for handling problems.
Finally, as I keep discussing, is the FACT that Ladenburg Thalmann and Armistice wanted control of Bioasis through their set up of control of Biodexa. I think that Bioasis, Midatech and Cresence were just tools, or pawns, in the setup to get control of xB3. There is no explanation as plausible as that. The inclusion of Dr. Deborah Rathjen and Dr. Mario Saltarelli in the deal, and the fact that they all announced that Midatech/Biodexa would not be in the drug delivery business, make it highly likely that the plan was to extract xB3 from Biodexa and place it in other, likely private, hands.
As with all public companies, many things remain circumstantial or conditional until they are actual. Technologies remain unproven until proven. Deals are not deals until signed. But companies must make true statements. They must not make false statements. They must disclose what must be disclosed. In my opinion, Rathjen has obfuscated and dissembled in her disclosures. The Ellipses “deal” is problematic. The Cresence deal was almost opaque. The downplaying of xB3 was foul and obvious. The 460-page information circular was, I believe, purposefully difficult, obscure, cumbersome, and beyond most shareholder’s ability to accurately consume. And it contained Evans& Evans’s warnings of conflicts of interest.
I get it. I understand the skepticism. But I don’t understand the shareholder apathy. xB3, I believe, works and it’s very valuable. It’s a shame that shareholders will give it up because of apathy and inaction.
So, G1945V, Bioasis has been on the record throughout its history of reporting dozens upon dozens of successes with no material failures ever reported. They have answered my questions and addressed my comments in the negative with respect to possible problems with xB3.
Bioasis is on the record. And people have attempted to acquire xB3. If it doesn’t work then the people who want it may see it as a tool for a pump and dump. I would suggest that the record would provide a lot of cover for such an undertaking. But the simpler explanation, the one using the rules of Occam's razor, the use of minimal assumptions, would suggest that the safest way and most profitable way to deal with xB3 is to develop it and to use it to produce the billions in annual revenue for which it is intended, and for which it has shown such promise.
And the people who own xB3 will only have to get an IND status on something to bring their private company to NASDAQ. Professional promoters would ensure an IPO of Denali proportions, making huge money for the private players, including Rathjen and Saltarelli if they remain a part of it all, which it looked like they were going to be. The best part for them is that can become very rich before an xB3 drug ever reaches phase one of a clinical trial. (Same as Bioasis shareholders could have.)
I’m not going to like watching that awful thing if it happens, which I think it will. It may not be a pretty sight, but the image of DrDR siting back with Da Boyz with a big cigar plugged in, all of them laughing at their good fortune and our misfortune, is beyond, well, beyond I don’t know what.
jd