The influential trader once called the Bounty Hunter of Wall Street may have been acting in the public interest as well as his own when he tweeted a warning about one of the leading biotech companies developing a novel coronavirus vaccine.
Or Andrew Left may have simply been seeking to cash in amidst a global pandemic, whatever impact his actions might have on Inovio Pharmaceuticals and therefore its effort to counter the contagion.
Back on March 2, Inovio CEO and co-founder Joseph Kim was among the pharmaceutical executives who met with President Donald Trump and Vice President Mike Pence in the Cabinet Room at the White House. Kim made a startling statement.
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“By getting just the DNA sequence of the virus, we were able to fully construct our vaccine within three hours,” he said.
“Our plan is to start the US-based clinical trials for Covid-19 vaccine in April of this year followed by shortly thereafter a trial in China and South Korea,” he went on. “There are a lot more infections in those areas.”
“We can give you an area, too,” Trump replied. “I mean, you take a look at Seattle… ”
Inovio stock jumped from $4.39 to $7.45 on March 3, then to $8.03 on March 4. The stock was at $18.72 at the open on March 9. It took a dip to $17.17 in the first hour, perhaps a reining-back on the exhilaration of the rise. The dip became a plummet when Left’s investigative firm, Citron Research, tweeted an accusation that what Inovio offered as hope was just hype. The tweet essentially accused Kim of lying to the president in a time of national emergency.
“SEC should immediately HALT this stock and investigate the ludicrous and dangerous claim that they designed a vaccine in 3 hours. This has been a serial stock promotion for years. This will trade back to $2. Investors have been warned.”
Left is what is known as an “activist short-seller,” meaning that he bets a stock will go down and then makes negative public allegations that cause it to do just that. He has done so more than 50 times, most famously when he rightly accused Valeant Pharmaceuticals of inflating sales reports with fake transactions. Valeant’s stock dropped 90 per cent from its high.
Over time, Left has been right often enough that a negative report from him can have a devastating effect on a company. His 10:38 a.m. tweet about Inovio caused the stock, as publicly listed on NASDQ, to drop from $17.17 to $14.84 by 11 a.m. and then to $11.17 at noon, then $9.47 at 1:30 pm. It rose slightly at the close to $9.83, but by March 10 it was down to $5.70.
But however right Left may have been about Valeant, he may well have been wrong about Inovio. The company's efforts are financially supported by a recent grant from the Coalition for Epidemic Preparedness Innovations (CEPI), the founders of which include Bill Gates.
A prominent and impartial scientist contacted by The Daily Beast said that it was neither ridiculous nor dangerous for Kim to have claimed Inovio had designed a vaccine in three hours. The scientist said graduate students routinely perform the same basic process.
When asked by The Daily Beast about Left’s accusation, Inovio provided a timeline.
Dec. 31, 2019: Inovio scientists learn about a novel coronavirus (SARS-CoV-2) which caused an outbreak of respiratory disease in Wuhan, China, now referred to as COVID-19.
Jan. 10, 2020: Chinese researchers share the genetic sequence of the novel coronavirus. Inovio designs DNA vaccine INO-4800 in three hours after receiving the genetic sequence.
Jan. 10 to Jan. 23: Inovio scientists race to manufacture INO-4800 and begin preclinical testing.
Jan. 23: Inovio receives a grant of up to $9 million from the Coalition for Epidemic Preparedness Innovations (CEPI) to fund ongoing pre-clinical and initial clinical development of INO-4800.
Jan. 23 to Feb. 29: Pre-clinical testing continues, with immune responses generated in animal models; human clinical trial designs developed.
March: Ongoing pre-clinical studies; human clinical trial designs finalized; 3,000 human trial doses will be prepared for clinical trials in the U.S., China, and South Korea; large-scale manufacturing plans developed.
April: Human clinical trials will begin in 30 healthy volunteers in the U.S. Human clinical trials to begin in China and South Korea shortly thereafter.
Fall 2020: Human clinical trial results to be presented/published.
End of 2020: 1 million doses of INO-4800 COVID-19 DNA vaccine to be produced for further trials or emergency use.
Kim might have better served himself and everybody else if he had emphasized that there is no guarantee that the vaccine will work. But he does not seem to have said anything false or misleading. The Inovio spokesperson was asked what motive Left may have had for alleging otherwise.
“Can’t speculate,” the spokesman cooly replied. “Perhaps a lack of understanding of the science behind DNA medicines.”
A longtime Inovio investor who happens to live in Kirkland, Washington, the first coronavirus hotspot in America, feels that Left must have just been looking to make a score. Sarah Anderson views him as “the classic example of Wall Street Greed over anything else.”
“To try to take down for his own gain one of the few companies working to develop a vaccine is morally reprehensible to me,” she said. “It makes me madder than hell... It’s so callous.”
Anderson said she first took interest in the company in 2014, after her mother died from pancreatic cancer. She saw investing in Inovio as a way to support innovation in vaccines for cancer and infectious disease.
“I‘m not in it for the money,” she said. “If I get the money, that’s good, but I’m more in it to support the science.”
The Daily Beast asked Left about the investor’s concerns.
“My response is go fuck yourself and buy real stocks,” he said.
He also had a message for the company: “Work your business and stop worrying about your stock.”
He did not answer directly when asked if his dismissal of Inovio’s three-hour claim was based on science.
“Where’s the vaccine?” he asked. “I’m waiting for it.”
He allowed that he did stand to profit if the stock went down.
“I was short the stock at the time,” he said in the lingo of his short-sellers.
But he maintained that the drop would have come without his tweet.
“I’m influential, but I’m not that influential,” he said. “It’s going to go down anyway long-term.”
He soon after ended the interview saying, “I have to boogie.”
The remaining question was whether Left acted on the basis of an informed opinion or simply out of a desire to make a score. A noted expert on activist short sellers told The Daily Beast that they can serve a necessary purpose.
“It’s important to have skeptics out there,” Joshua Mitts of Columbia Law School said, speaking in general.
The beneficial ones are guided by research. The harmful ones engage in what he terms “drive-by shootings.” Mitts was not in a position to judge where Left fell in the spectrum.
A legitimate skeptic might note that Inovio has not brought a major vaccine to market in the 13 years since its founding. But Anderson is far from alone in believing that the company’s science holds. Inovio was one stock that went up on Wednesday, rising nearly 47 percent, from $6.85 to $8.37 even as the Dow Jones Industrial Average tumbled more 1,400 points, ending 11 years of a bull market.
Anderson was out in Kirkland, keeping the faith that her investment has a value beyond money as the whole country seems to be on the way to becoming a hot zone. She reported that she has the sniffles and a cough, but no fever.
“It is a little worrying when you get a cold,” she allowed. “I don’t want to go to a public place and make everybody nervous.”
