[Ed. Note: Dr. KSS writes about medicine and biotech stocks for the Irregulars. He has agreed to our trading restrictions, chooses his own topics and his words and opinions are his own. You can see all of his past articles and most recent comments at his Stock Gumshoe page.]
In June 2016, we advanced ScyNexis ($SCYX) as a long investment idea in the antimicrobial space. While I remain with a long investment in $SCYX and have added to my original position, the position is down in value about 25 percent overall because of the company receiving from the FDA a clinical hold on lead drug SCY-078. The hold pertains only to the iv form of the drug, not the oral form.
Here is ScyNexis’s announcement of the clinical hold. In discussions at one of our monthly conference calls and in the biotech threads, we realized considerable confusion exists among investors about the events leading to the hold and how the hold can possibly be resolved. I contacted ScyNexis and arranged a conversation with Eric Francois (photo below). Francois is chief financial officer of $SCYX and was acting at the time as a media contact for the company because more senior officers were on the road at meetings. Francois joined management after ScyNexis moved from Durham, NC, where it was founded, to New Jersey to have better access to capital markets.
Francois received a BA in economics and an MA in marketing from Pantheon Sorbonne University in Paris, France. He cofounded technology start-up Topi, Inc. For six years, he was a director in Lazard’s Equity Capital Markets group; in that he role he advised biotechnology and healthcare companies and led capital raisings for them. He is plainspoken, lucid, animated. Francois is friendly and seems at ease with the jackhammering pace of northeastern US biotech start-ups with real intentions of succeeding. He was appointed in November 2015 and awarded options for 100,000 $SCYX shares; the strike price is underwater at present. He owns 15,000 company shares.
He got to the point of why I’d called: The iv formulation of SCY-078 is in FDA purgatory because of three thrombotic events deemed mild-to-moderate in severity. Recall that 078 is a drug originally developed by Merck ($MRK) which, after completing a few phase I studies on it, opted not to develop it further, possibly because of a prevailing perception at the time that the ...