Citing reports of “alarming toxicity” among other accusations, short-seller Scorpion Capital will file a Citizen’s Petition with the FDA to have its approval of Wakix withdrawn.
Pictured: Scales of justice swing in the air/courtesy of Shutterstock
Citing reports of “alarming toxicity” among other accusations, short-seller Scorpion Capital will file a Citizen’s Petition with the FDA to have its approval of Harmony Biosciences’ narcolepsy treatment Wakix (pitolisant) withdrawn.
Scorpion made its allegations in a 366-page report published Tuesday, where it built its case against Wakix.
The report cites Scorpion’s calls with unnamed “experts” and former Harmony employees, Harmony earnings calls, Harmony’s publicly filed earnings and research data, news articles, Wakix advertisements, SEC filings, patent filings, NIH documents describing Wakix’s mode of action, CEO/Founder Jeff Aronin’s news statements and private foundation filings to create an amalgam of data.
Scorpion questioned Wakix’s clinical safety data and claimed that Harmony submitted unsubstantiated evidence to the FDA, which led to errors in the agency’s assessments and regulatory decisions.
Wakix’s approval, the short-seller asserts, was a “poster child” for the lapses, loopholes and overall weaknesses in the FDA’s accelerated approval pathway.
Scorpion also claimed it was implausible that Wakix, a first-in-class histamine 3 receptor antagonist licensed from French company Bioprojet, could have succeeded in a drug class where larger and more established pharma companies failed.
Harmony’s shares dropped 25% Tuesday afternoon after Scorpion’s report went live.
In response to Scorpion’s report, a Harmony spokesperson told BioSpace via email that the company disagrees with the assertions and said that Harmony’s science has passed the rigor of peer review and various regulatory bodies globally.
“With regards to a Citizen Petition, we have not seen anything filed publicly at this time,” the spokesperson said.
Scorpion did not respond to BioSpace‘s request for comment.
In its report, Scorpion also said it had conducted in-depth interviews with 16 unnamed doctors and alleged that aside from Harmony’s paid speakers, there were “almost no high-volume prescribers” of Wakix.
Scorpion accused the Pennsylvania-based biopharma of running an off-label marketing strategy and a physician-kickback scheme to push Wakix.
The Drug at the Center of the Controversy
First developed by Bioprojet, Wakix is a small molecule drug that binds to the histamine 3 receptor. The FDA approved Wakix in August 2019 for the treatment of excessive daytime sleepiness in adult patients with narcolepsy, a sleep disorder commonly caused by deficiencies in molecules in the brain that support sleep-wake stability.
The exact mechanism for Wakix is unclear, but the drug could exert its effects by increasing the production and release of histamine, a neurotransmitter known to promote the waking state.
At the time of its approval, Harmony touted Wakix as the first non-controlled substance indicated for narcolepsy.
In its report, Scorpion alleged severe and potentially fatal side effects associated with Wakix. The drug’s label bears a warning for prolonged QT intervals, a heart signaling disorder that can cause arrhythmias and could increase the risk of sudden cardiac death when occurring excessively.
The label also notes that insomnia, nausea and anxiety were common adverse events associated with Wakix, in line with data from the HARMONY 1 and 1bis trials, which supported the drug’s approval. Post-marketing monitoring also found episodes of fatigue, weight gain, pruritus, psychiatric conditions and epilepsy among patients taking Wakix.
Scorpion’s Recent Targets
Scorpion is an “activist” short-selling investment firm that conducts “differentiated research which uncovers what investors have missed and Wall Street is paid to ignore,” according to the firm’s website.
It has targeted other biopharma companies in the past, including Twist in 2022, Ginkgo in 2021 and Inovio in 2020.
Its reports have strong negative effects on its targets’ stock prices. Twist’s shares, for instance, dropped 57% in response to Scorpion’s allegations in November 2022, while Ginkgo lost 90% in October 2021.
