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Shares of Enochian BioSciences (ENOB) fell 29% so far this week, as investors continued a sell-off that started with the federal indictment of the co-founder and largest shareholder of Enochian BioSciences, Serhat Gumrukçu, MD, PhD, on charges related to a 2018 murder-for-hire.
Gumrukçu, 39, of Los Angeles, is among four men charged over the past two months by federal prosecutors with involvement in a murder-for-hire that resulted in the death of Gregory Davis of Danville, VT.
According to the prosecutors’ complaint, first reported by VTDigger [the Office at deadline had not responded to a GEN request for a copy of the indictment], Davis had a dispute with Gumrukçu and his brother Murat Gumrukçu: “In 2017, Davis was threatening the Gumrukçus about going to the FBI with evidence that the Gumrukçus were defrauding him in a multimillion-dollar oil deal that the Gumrukçus had entered into with Davis in early 2015.”
Davis was removed from his home on January 6, 2018 by a single man impersonating a U.S. Marshal, according to Vermont State Police and FBI, whose investigations led to the indictment. The next day, Davis was found dead in handcuffs, shot multiple times in the head and torso, then left in a snowbank several miles from his home, Vermont State Police told the Rutland Herald.
Gumrukçu and Berk Eratay, 35, of Las Vegas, Nevada, were arrested May 25 after being charged by a federal grand jury in Vermont with conspiring to use interstate commerce facilities—namely cell phones—in the commission of murder-for-hire which resulted in Davis’ death.
A lawyer for Gumrukçu, Roy Black of Black, Srebnick, Kornspan, & Stumpf, P.A., at deadline had not responded to a GEN email about whether his client will defend against the federal charges.
If convicted, Gumrukçu and Eratay face the death penalty, or mandatory life in prison.
Enochian responded to the arrest of Gumrukçu on May 25 with a statement from its board asserting that it only learned of his arrest from DoJ’s press release; that the murder-for-hire occurred before the February 2018 completion of Enochian’s acquisition by DanDrit Biotech USA “and is completely unrelated to the company.”
“The Board reviewed the important scientific discoveries of the inventor [Serhat Gumrukçu] and the Company’s rights with regards to those discoveries, which will be unchanged. The Board confirmed that Serhat Gumrukçu has had no formal role in the Company, and has no involvement with the Company’s strong management, scientific team and collaborations with leaders in the field,” Enochian’s board stated. “Therefore, the board strongly affirms its confidence in the company’s promising future.”
Based in Los Angeles, Enochian focuses on developing gene-modified cellular and immune therapies for infectious diseases—including SARS-CoV-2, influenza, hepatitis B virus, and HIV—as well as several types of cancer. All of Enochian’s pipeline candidates are in preclinical phases, though the company says it could potentially begin patient enrollment in up to four trials of its treatment candidates this year.
Investors, however, have failed to see that promise. Shares of Enochian plummeted 37%, from $5.87 to $3.70, on May 25, the day DoJ announced its charges against Serhat Gumrukçu. By Tuesday, shares had rallied 42% to $5.26. That day, Enochian issued a press release quoting three “prominent scientific leaders” investigating the company’s drug candidates, saying that they “agree on the promise of Enochian BioSciences’ approach and are working to carry out studies that will drive new therapies forward.”
But on Wednesday, after a negative “short” report on the company by Hindenburg Research focused on Gumrukçu’s background, shares of Enochian fell 28%, to $3.765.
Aeglea BioTherapeutics (AGLE)
Aeglea shares shrank 40% in early trading Thursday after the company acknowledged that it received a Refusal to File (RTF) letter from the FDA in response to its Biologics License Application (BLA) for its lead pipeline candidate pegzilarginase as a treatment for the rare disease Arginase 1 Deficiency (ARG1-D).
According to Aeglea, the FDA sought additional data to support the drug’s effectiveness, such as evidence showing that plasma arginine and metabolite reduction predicts clinical benefit in patients with ARG1-D or clinical data demonstrating a treatment effect on clinically meaningful outcomes. The FDA also requested additional information relating to Chemistry Manufacturing and Controls (CMC). There were no issues related to safety raised in the letter.
In response, Aeglea said it intended to request a Type A meeting with the FDA to clarify and respond to concerns raised by the agency in its RTF letter.
“While we are disappointed in the outcome of the FDA’s initial review of our BLA, we continue to believe in the potential of pegzilarginase and thank the FDA for their constructive comments and ongoing collaboration,” Aeglea President and CEO Anthony G. Quinn, MB ChB, PhD, said in a statement. president and chief executive officer of Aeglea. “We believe the requests identified in the RTF letter related to CMC can be readily addressed and we intend to work collaboratively with the FDA to identify a viable path forward to demonstrate that lowering plasma arginine confers clinical benefit.”
Investors reacted with a sell-off that sent Aeglea shares sinking from $1.50 to $0.8984 as of 11:32 am ET.
Aeglea’s BLA submission included positive results from its double-blind, placebo-controlled Phase III PEACE trial (NCT03921541) and its ongoing long-term extension study as well as a Phase I/II clinical trial (NCT03378531) and its open-label extension study.
Outlook Therapeutics (OTLK)
Shares of Outlook have tumbled 37% since Tuesday, when the company acknowledged that it had voluntarily withdrawn its BLA for its sole clinical candidate LYTENAVA™ (bevacizumab-vikg), a wet age-related macular degeneration (wet AMD) treatment previously known as ONS-5010.
The withdrawal came after the FDA requested unspecified additional information to complete the BLA filing of LYTENAVA, an ophthalmic formulation of bevacizumab being developed as an intravitreal injection to treat wet AMD and other retinal diseases. Outlook said it was “actively working” to respond to the FDA request and plans to resubmit a revised BLA by September.
Investors responded with a stock selloff that sent Outlook’s shares plunging 60%, from $1.69 on Friday, to a 52-week low of 68 cents on Tuesday before bouncing back that afternoon to a 32% decline or $1.15 a share at the close of trading. Shares dropped another 7% on Wednesday, to $1.07, and dipped another 1% in early Thursday trading, to $1.0607 as of 11:53 a.m. ET.
“We are continuing to have productive discussions with the FDA and are committed to providing the additional information necessary to support the application. We look forward to a successful resubmission and ultimately the potential approval of ONS-5010 for the treatment of wet AMD,” Russell Trenary, Outlook’s President and CEO, said in a statement.
Bevacizumab has been marketed since 2004 by Roche and its Genentech subsidiary under the brand-name cancer-fighting drug Avastin®. However, doctors seeking to use the drug for eye disorders have had to use unapproved repackaged IV bevacizumab from compounding pharmacies.
“We remain confident in ONS-5010 and its potential to be the first FDA-approved ophthalmic formulation of bevacizumab that avoids the public health risk to patients of off-label treatment of bevacizumab that was never approved for any ophthalmic indications,” Trenary added.
vTv Therapeutics (VTVT)
vTv Shares surged 80% in premarket trading Wednesday before investor profit-taking reduced that to a 44% increase at the closing bell, after an affiliate of Abu Dhabi-based artificial intelligence and cloud computing company G42 Healthcare signed an up-to-$55 million collaboration agreement for future development of vTv’s type 1 diabetes candidate TTP399.
Under the agreement, the G42 affiliate will use part of the proceeds to fund Phase III clinical trials for TTP399, in return for an exclusive license from vTv to develop and commercialize pharmaceutical products containing TTP399 in areas described in a regulatory filing as “principally consisting of the Middle East, Africa and Central Asia.” vTv retains those rights in the U.S. and European Union.
The rest of the proceeds will be used for general corporate purposes and working capital, vTv added.
TTP399 is a novel, oral, small molecule, liver selective glucokinase activator being developed as an adjunct therapy to insulin in patients with type 1 diabetes. TTP399 has been evaluated in almost 600 patients.
What appeared to wow G42 was results from the 115-patient Phase II, JDRF-supported SimpliciT-1 Study (NCT03335371) in which patients treated with 800mg of TTP399 showed a 40% reduction in hypoglycemic episodes compared to placebo after 12 weeks of treatment in participants randomly assigned to TTP399 or matched placebo (fully blinded). The difference in change in HbA1c from baseline to week 12 between TTP399 and placebo was -0.7% in part 1 (20 randomly assigned participants using continuous glucose monitors and continuous subcutaneous insulin infusion or CSII) and -0.21% in part 2 (85 randomly assigned participants receiving multiple daily injections of insulin or CSII).
In October, vTv announced results of a mechanistic study of TTP399 in patients with type 1 diabetes showing no increased risk of ketoacidosis.
G42 Investments AI Holding RSC acquired 10,386,274 shares of Class A Common Stock of vTv at $2.407 per share for a total $25 million—of which half will be payable at closing, and the remaining half payable on May 31, 2023. vTv also agreed to issue another $30 million in its stock to G42 Investments, (or cash, if it exercises that option) if the FDA approves the marketing and sale of a pharmaceutical product containing TTP399.
“G42 Healthcare brings a unique combination of strong commitment to the development of new impactful drugs and treatments, as demonstrated by their success and their leadership on COVID-19 testing and other product and service offerings in the healthcare spectrum, and substantial resources, making them an ideal partner for this program,” stated Rich Nelson, vTv’s Interim CEO.