In defense of Adam Feuerstein

Ever since I started this blog I’ve tried to keep it strictly dedicated to analyzing biotech stocks. Today, I would like to make an exception as I feel I must share my opinion about Steven Pearlstein’s story in The Washington Post insinuating that Adam Feuerstein is part of a short sellers’ conspiracy against Northwest Bio (NWBO). When a respected journal breaks with such a preposterous story, we sane biotech bloggers must take a stand.

I don’t know Adam Feuerstein and have never met him. I do read his columns on a regular basis and think he is doing a good job reporting and analyzing biotech companies. In my opinion, his coverage is professional and fair, as he often discusses both the “bull” and “bear” arguments for a given stock.

Adam has an important role of exposing a minority of biotech companies that give this sector a bad reputation. These companies, unlike most biotech companies which are focused on drug development, are busy manipulating and deceiving retail investors who fund worthless development programs and unjustified salaries. Every biotech company has to “sell” itself with press releases and uplifting projections but some companies use PR spins and data manipulations to cast a smokescreen, enabling them to return time after time to investors and raise more money.

You won’t read the truth about these companies in most places for a myriad of reasons: They are not developing interesting drugs, they are usually very small and therefore overlooked by institutionals and sell side analysts, and because most people in this industry (myself included) have little to gain by criticizing them.

For many biotech investors, Adam represents the only line of defense against those fundamentally deceptive companies. He is truly free of hidden agendas as he is not part of a company or an investment group nor does he own stocks. It is so ironic that a respected journal like The Washington Post is part of a campaign seeking to discredit one of the only true journalists who cover the sector.

The attempt to blame short sellers for Northwest Bio’s poor stock performance is pathetic. It is always easier to cling to conspiracy theories, instead of acknowledging the fact that the company has never provided compelling evidence that its cancer vaccines provide benefit to patients. Northwest is not a victim, it is a victimizer of investors and patients. I can only hope that Adam Feuerstein will continue his critical coverage of companies like Northwest Bio.

I would like to express full support of TheStreet’s letter which is calling for the retraction of Pearlstein’s column.

Full disclosure – I never had nor do I plan to have a position (short/long) in NWBO.  

30 thoughts on “In defense of Adam Feuerstein

  1. glad you made that comment. When a sector gets hot there is always those who try to take advantage of the flavor of the month. I remember the implosion of the dot com bubble and others where unsophisticated investors lost their shirts. It’s good someone is riding shot gun on these stocks. If the company has something legitimate nothing will stop it from going up.


  2. John d – Thanks. Agree, when a drug works it always become reflected in the stock price in the long run.

    Ohmson – Thanks, ESPR’s data look very good at first glance. We need to wait of course to see actual data to know for sure.



  3. Is it unusual for so many law firm’s “investigations” regarding the AMBI buyout? Looks like around half a dozen at least. Have you seen this before and do you think it will encourage a higher buyout price? Sure would be nice to get the value of the CVR up front.


  4. Ohad
    great call on both small companies – AMBI and ESPR.
    ESPR results look very good – 48% reduction (p 0.0001) in combo with ezetimibe.
    Do you follow PTLA – they had a good set of data today in the first Ph 3 trail. They already have a breakthrough designation and will file for accelerated approval.
    thanks –andre–


  5. Dan S. – Usually you see these type of lawsuit initiatives when things go wrong. There are cases where shareholders oppose a proposed M&A but this usually comes from specific large shareholders. Anyway, I don’t expect this to have an impact on the deal.

    andre – Thanks! I first added both AMBI and ESPR in the same post, claiming they are cheap IPOs. Until now they were one of worst performing IPOs but glad this changed.
    Re PTLA, not very familiar there.



  6. You are either a short defending the “criminal” AF [quotation marks used to indicate AF has not yet been approved of a criminal yet] or just a plain idiot!


  7. Hello Ohad,
    thanks for your helpful advices. Three questions. Galapagos had a disappointment with GSK2586184. The pps is now in my opinion favorable. The company is expecting Phase II data on the AbbVie-partnered RA treatment GLPG0634 early next year, with a big $250 million payment if successful. The market seems to have doubts about GLPG0634. What is your opinion?

    MacroGenics has attracted leading pharmaceutical and biotechnology companies with their platform. But their leading program margetuximab (HER2) seems to be nothing special. Do you see value?

    Evotec: I think respective reducing the risk of an investment it’s like holding a mutual fund because they have so many alliances and partners (e.g. Boehringer Ingelheim, Novartis, Roche, Bayer, Yale University, Harvard University), a positive EBITDA, strong liquidity position and a high equity ratio. Long-term interesting. Have you a different view?


  8. I can’t believe how much people hate AF – iit just shows in that post by my omonimous “dan” .

    Hey Ohad,
    yes great call on AMBI and ESPR – I addedthem both when you first suggested them then added more Ambi as it fell down. So wanted to thanks you for your advice! Looking forward to your next posts!


  9. Toby – Re GLPG, I don’t have a strong opinion in either direction.

    MGNX – To me, their bispecific platform (and pipeline) is clearly a more attractive asset than margetuximab. I like the CD123 program in AML very much but results will take at least 6 months.

    Evotec – Their pipeline is not attractive imo, a lot high risk CNS programs.

    Dan – Thanks, glad you were able to make a profit. The lesson here is the importance of timing. Good assets can become undervalued for many reasons we can’t always understand.



  10. Ohad,
    re Evotec. They have multiple programs, so high risk is no problem. They can handle failures due to the broad pipeline and the financial stability. The partners pay for the programs, Evotec has may opportunities for milestone payments and profit-sharing. I think the business model is clever.


  11. Thanks, yes about good assets being sometimes undevalued for mysterious reasons, or good reasons. This morning I made an investment in NSPH.
    The valuation is $39M. In my view the company is undervalued. Management has not been execution but the technology is useful to hospitals.


  12. Ohad,

    Do you have any idea about the upside potential for STML, AERI, and FMI? The price seems attractive now but not sure it’s a good entry point.



  13. Hi Ohad,
    Along with others always appreciate your insights and willingness to share your knowledge and opinion. I would never have considered AMBI without your input and was lucky enough to initiate a position after most of the sell-off.
    Have you looked at GenSpera (GNSZ)? Developing a peptide activated prodrug with a plant based toxin, now in a couple of early Ph-II trials. Full disclosure I am long and not trying to pump, but curious to hear any thoughts you might share as this looks very interesting (albeit early).
    Aso CYTR, similar story, developing a lead candidate using albumin binders for delivery of doxorubicin in concentrated dosage. Recently received orphan drug status from FDA for glioblastoma multifome, small cell lung and ovarian (also long).
    thanks again,


  14. Toby – Agree about the risk mitigation associated with a broad partnered pipeline, but any company needs a lead asset with a clear route to market. I can’t identify that in their pipeline.

    Dan – Not familiar with NSPH, will take a look.

    Cloud (STML, AERI, FMI ) – All three are very attractive imo with FMI being my top pick. They have strong clinical proof of concept and should also be viewed as acquisition targets.

    Jeff – Thanks, glad I could help. I looked at GNSZ a while ago as I was intrigued by their mechanism which looked compelling on paper. I remember the main issue I had is that clinical activity did not appear that profound as monotherapy. Also, PSMA does not look like an ideal target based on experience with PGNX, BIND. CYTR is a similar story imo, looks good on paper but clinical performance is uninspiring.



  15. Thanks Ohad for your work on AMBI. I liked the drug and the stock, but my personal hematologist thought the market would never be there for such a niche indication. In any case, I went with your advice and loaded up. My retirement is much more secure thanks to you.


  16. Ohad,
    You’re a gem. Thanks for making your thoughts public.
    I don’t recall you discussing Halozyme’s PegPH20 in the past (may be wrong). Any thoughts on whether you think this might work in oncology?


  17. Ohad
    In the past you were skeptical about ARIA, if I remember correctly you had issues with toxicity of ponatinib, which turned out to be right on the mark.
    However ARIA just received breakthrough designation for their ALK inhibitor in NSCLC. Does it change your opinion about the company?

    About ESPR – you have been ahead in your analysis by an year. Now many blogers and analysts are using similar argument that 1002 will take some, if not most, of the PCSK9 pie. Well done!

    About CALA – is glutaminase inhibitor of any interest for you?


  18. Ohad, Thank you on AMBI, and kudos to you for the post on AF and NWBO. Also, I was glad to read through all the posts and see that “dan” was not Dan (and I even learned a new word from Dan). Kirk


  19. Richard – Glad to hear. Given that FLT3 mutations occur in ~30% of AML cases the market opportunity is definitely there even though not an instant blockbuster.

    Fred – Thanks. It has been a while since I looked at HALO for oncology. The scientific rationale is there as pancreatic cancer is notoriously inaccessible to drugs but last time I checked I was on the skeptics camp.

    Allen – Thanks, glad to hear.

    andre –

    ARIA – I thought their ALK data was pretty robust and numerically better than Zykadia. If this was the only next-gen ALK inhibitor in development then it would be a huge winner for them, but in a world post Zykadia and alectinib approvals it may be hard for ARIA to compete. Having said that, there is always a chance ARIA’s drug works in patients who develop resistance to other next-gen ALK inhibitors but this requires proof of course.

    ESPR – Thanks. Now the debate is moving to whether LDL-C lowering is still an approvable endpoint. We’ll learn that from PCSK9 antibodies.

    CALA – Yep, very much of interest as anything else going on in cancer metabolism. Still studying the story here.

    Kirk – Thanks you, no worries I wasn’t concerned 😉



  20. Hi Ohad,

    I started following your blog 2 months ago and learned to respect your knowledge sharing and perspective, thank you and keep on the good work!
    Among others following I’ve made a nice gain thanks to your comments on AMBI so thanks for that too!

    Would love to hear your view on Mannkind (MNKD).
    I started monitoring the company in June after the FDA approval of Afrezza (I do not hold any position yet) and was wondering whether you have any thoughts on the potential there and if you see their current price as a buying opportunity.



  21. Ohad,
    a second question to Affimed. You wrote “so far the cd30 results are disappointing, show that nk and macrophages may not be potent enough…”. Can you give a more detailed explanation to this? Actual the statement “In a recent phase 1 dose-escalation clinical trial, AFM13 was well-tolerated and demonstrated tumor shrinkage or slowing of tumor growth, with disease control shown in 16 of 26 patients eligible for efficacy evaluation” seems to be not bad.
    Thanks Toby


  22. Hi Ohad, I’d be interested in hearing your thoughts about Oncogenex (OGXI). Its trading well below cash now. Is there any value in OGX427, a HSP27 inhibitor?




  23. Yakir – Thanks, glad to hear. Re MNKD, I am no expert in the field but I would sit that one out. Valuation appears rich imo.

    Toby – They had some anti-tumor effect but imo it wasn’t overwhelming compared to other programs in development (bsAbs or ADCs, in particular).

    Rick – I am not folloing them but not a great believer in their approach.

    Alex – See what I just published. I sold all positions and will consider getting back in after they deal with their debt. The CoBrim data were positive but comparable to GSK’s data so no positive surprises there.



  24. Ohad, I’m thinking of taking a position in ECYT. My thinking is that the Vintafolide drug had a weak chemotherapeutic, vinblastine, and that was the problem with the drug, not the linker and not the receptor target. The stock is at a 52-week low and the EV is less than $30 million. What do you think?


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s