Hedge Funds Laser Focused on Pharma

FOIAengine Identifies 57 New FOIA Requests to FDA

Hedge funds and other financial institutions made 57 Freedom of Information Act (FOIA) requests last month to the Food and Drug Administration (FDA) seeking information about adverse drug events and drug-manufacturing-facility inspections identifying health risks.  These reports can significantly affect a pharmaceutical company’s financial performance and stock price.

According to PoliScio Analytics’ competitive-intelligence database FOIAengine, which tracks FOIA requests in as close to real-time as their availability allows, 19 different financial players submitted FOIA requests to the FDA during July and August.  As was the case in June, hedge fund Point72 led the list (with 19 requests), followed by RBC Capital Markets with six requests, Balyasny Asset Management with five requests, Vestal Point Capital with four requests, and Morgan Stanley with three requests.

FOIA requests to the federal government can be an important early warning of bad publicity, litigation, or stock price movements to come. Noteworthy financial industry FOIA requests to the FDA in July and August included:

Catalent’s plant in Harman, Md. was inspected by the FDA on May 12, 2023.  In July and August, nine different financial industry players submitted 13 FOIA requests for the release of reports resulting from that inspection, including Form 483 inspection reports and Establishment Investigation Reports (EIR). This exceeded the seven FOIA requests in June for documents about Catalent’s March 10, 2023, inspection report.

A Form 483 report is issued by FDA inspectors to firms at the conclusion of an inspection that has found indications that a drug has been or may become adulterated or injurious to health. An Establishment Investigation Report is a more detailed follow-up report written within 30 working days of the inspection.

In the past, challenges at several of Catalent’s production facilities have contributed to disappointing financial results, but this summer shares in the company increased from $32.86 on May 12 to $49.97 on August 31. The company’s stock price rose 5% on August 29 after the company announced a deal with activist investor Elliott Management and reported its preliminary fourth-quarter and fiscal 2023 results.

Catalent said that it reached an agreement with Elliott to appoint four new independent directors to its board to be nominated by Elliott, and it formed a new committee to review its business, strategy and operations, as well as its capital allocation strategy to increase the long-term value of the company.

Apellis Pharmaceuticals: Two financial industry firms (Vestal Point Capital and Point72) submitted a total of six requests asking for any FDA Adverse Event Reporting System (FAERS) reports regarding Apellis Pharmaceutical’s prescription eye-disease injection Syfovre (generic name pegcetacoplan). Syfovre is the first and only FDA-approved treatment for geographic atrophy, the advanced form of age-related macular degeneration.

Apellis stock declined dramatically in July and early August from a high of $92.32 on July 28 to a low of $23.65 on August 7. Since then, Apellis shares have seen an upward trend, reaching $48.30 on September 19.

In August, Apellis announced layoffs aimed at saving $300 million while it struggles to commercialize Syfovre. The drug was approved by the FDA in February, but “experts have since raised concerns about safety issues, including reports of occlusive retinal vasculitis, which blocks blood flow to the retina and can cause blindness.” Apellis reported it has reviewed its manufacturing processes and says it identified the problem last month. According to Apellis, some Syfovre injection kits included 19-gauge filter needles that had internal structural variations. Apellis recommended that kits with 18-gauge filter needles be used instead.

Other financial-sector FOIA requests to the FDA in July and August included:

  • Three requests from Phalanx Investment Funds and Balyasny Asset Management for inspection reports at Eli Lilly facilities in Durham, North Carolina and Branchburg, New Jersey.
  • Two requests from Hudson Bay Capital and Point72 for inspection reports in early 2023 at WuXi Biologics and WuXi STA Pharmaceutical, located in Wuxi, China. Balyasny Asset Management, which had submitted two requests targeting WuXi in June, filed no requests during July and August for information about the company.
  • As in June, there were two requests from Point72 for inspection reports on the Lonza AG plant in Visp, Switzerland and the Lonza Biologics plant in Portsmouth, New Hampshire.
  • Two requests from Point72 for adverse event reports for the drug Vyjuvek, marketed by Krystal Biotech.
  • Two requests from Farallon Capital Management LLC and Point72 for adverse event reports reported for Skyclarys, marketed by Reata Pharmaceutical.
  • Other FOIA requests from traders and analysts targeted the pharmaceuticals Briumvi, Lumryz, sodium oxybate, Tepezza, Zeposia, and Zimura, and the companies Acadia Pharmaceuticals, Ascendis Pharma, Baxter, Biocon, Blueprint Medicines, Iveric Bio, Pantheon Italia, Partners in Plastic Surgery of West Michigan, Regeneron Pharmaceuticals, REGN, Sage, and SpringWorks Therapeutics.

Following is a fund-by-fund tally of all FOIA request activity from financial institutions to the FDA during June:  Point72 (19 requests), RBC Capital Markets (6), Balyasny Asset Management (5), Vestal Point Capital (4), Morgan Stanley (3), Hudson Bay Capital (2), AJ Capital (2), Magnetar (2), Phalanx (2), and Tamridge Capital (2). Nine other financial institutions submitted one request each: BMO Capital, Bronte, CD55 Capital, Farallon Capital Management, Glazer, Raymond James, Rock Springs Capital, Stifel Financial, and T. Rowe Price. To review the FOIA requests mentioned in this article, become a beta user of FOIAengine.

Randy E. Miller, co-creator of FOIAengine, is a Washington lawyer, publisher, and former government official. He has developed several online information products and was a partner at Hogan Lovells, where he founded the firm’s Brussels office and represented clients on international regulatory matters. Miller also has served as a White House trade lawyer, Senior Legal Adviser to the U.S. Mission to the World Trade Organization, policy director to Senator Bob Dole, and adjunct professor at Georgetown University. He is a graduate of Yale and Georgetown Law.  FOIAengine is a product of PoliScio Analytics (PoliScio.com), a new venture specializing in U.S. political and governmental research, co-founded by Miller and Washington journalist John A. Jenkins.  Learn more about FOIAengine here.  Sign up here to become a beta user of FOIAengine.

Write to Randy E. Miller at randy@poliscio.com.