Sahm Adrangi: Bad Drug for Cystic Fibrosis May Mean Unsure Future for Proteostasis

Sahm Adrangi has been busy in his position at Kerrisdale Capital shorting companies who aren’t operating their businesses in an honest manner. He does this through the practice of value investing as a short-seller. Through value investing, not only do investors like Sahm Adrangi stand to make money if the company fails, they are also bringing to the attention of society the actions that the company has been engaging in.

The biotech company Proteostasis is one of the companies that are actively being shorted by Kerrisdale. While they have touted their new medication that is marketed as having the potential to treat cystic fibrosis, there’s a good chance that the medication won’t do much at all for these patients. Due to there not being that many viable options to treat the disease, the medication that Proteostasis is in the trial phase of production was given an “orphan drug” status by the FDA.

While they were given this status to try to push the approval of the drug faster, Sahm Adrangi believes that the company is taking advantage of the situation. The data that was released by Proteostasis during the Phase 3 trials wasn’t reliable says Sahm Adrangi. There were many omissions in the documents that were available publically that paint an entirely different picture than the data that was released by Proteostasis.

If the predictions made by Kerrisdale Capital are true, the Phase 3 trials in which the medication is currently going through will reveal everything to the public. Investors jumped on board when Proteostasis first published their less than upfront Phase 2 results and their stock price went up dramatically. This caught Sahm Adrangi’s attention and he realized that something didn’t seem right.

According to the research of Kerrisdale Capital, chances are the drug in testing phases may not have much of a beneficial effect for patients who have cystic fibrosis. There is even a chance that it may not help them at all and the benefits were merely skewed statistics and outliers that highlight the natural progression of the disease. Kerrisdale is almost positive that it will fail by the end of these trials.


Author: CDG1976

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