Summary

  • In Oct 2017, shares of ABEO hit a new high of $19.55 following the release of seemingly positive data in its clinical trial for MPS-III.
  • ABEO quickly used that strength to raise money in an equity offering at $16 in October.
  • But when additional data was released last week, ABEO quickly began to plunge every day.
  • “Smart money” investors now realized that Cohort 1 data had been badly manipulated to show optimal results.
  • Out of a three person Cohort, one patient was given an arbitrary “floor score” for a cognitive test – precluding any real chance of further declines in cognitive ability. Another patient was removed from the trial altogether.  
  • This information was not made clear in October at the time of the equity offering
  • In addition, Cohort 2 data was visibly mixed, with the strongest results coming from a disputed test method and with very negative indications coming from the industry standard test
  • The leading industry journal specifically recommends two different tests than the one being used by ABEO. The non recommended test is the one which analysts continue to cite as indication of strong results.
  • The investors who have figured this out have been selling heavily every day since that data was released on Feb 8th.
  • Yet sell side analysts continue to put positive spin on the results by focusing on a single “outlier” to explain negative results.