How to Avoid Heartbreak

Celyad’s Chart-1 trial has failed.

The failure is unambiguous*.


With that out of the way, we can dissect some of what went wrong and how investors can avoid future bouts of Cardio3/Celyad-induced portfolio decompensation.


In the heart failure area, mouse models are not serious efforts at validating the platform. End of story. Companies such as Cardio3 / Celyad, and their academic collaborators, move therapies into the clinic based on efficacy in mouse models without repeating the observations in large animal models. Mouse preclinical models of heart failure designed to rationalize a treatment’s transition to the clinic are simply not useful, not reliable, and not reflective of human pathophysiology. They are necessary as a precursor to testing in a large animal model where the platform’s efficacy should be reproduced, albeit at smaller effect sizes. However, they are not sufficient.

And upon reflection, this point has a very obvious but important element: the company and its collaborators know this as well!

I can assure you the in-house scientists and academic collaborators at companies such as Cardio3 / Celyad know full well efficacy in mouse models is not a serious hurdle for the development of heart failure therapies. They know full well that multiple cell therapy efforts with stunning results in mouse models moved into the clinic and walked away with an HR of ~1. They know full well the importance of the therapy showing reproducible efficacy in large animal models.

Investors can debate the reasons and motivations behind companies and collaborators running through preclinical studies at such a record pace. However, many of the descriptors are unflattering.


Track record matters. Not a novel insight by any means. However, companies based primarily on the work of academic collaborators can offer investors an additional edge in appraising the prospects. Over the last 12-18 months, both Celladon and Cardio3/Celyad have had significant failures in the clinic. Each company relied heavily on work derived from academic collaborators. It is wholly appropriate for investors to examine future start-up efforts from those academics with skepticism and take track records into consideration when doing their due diligence.


Never trust a phase 2 trial that succeeded based on subgroup analyses. This, also, is not novel and may have exceptions. However, in the heart failure field, it is almost axiomatic. Cardio3/Celyad’s phase 2 trial leading up to Chart-1 did not focus on the intent-to-treat (ITT) analysis but kicked out some participants for whom the cell therapy could not be procured / manufactured. That was always a red flag. But it is compounded in heart failure where participants appear to be a much more heterogenous group at all stages. Small (n < 100) trials in heart failure tend to pop up positive even with proper control arms. Perhaps it is because we don’t understand the disease all that well, and we’re still learning how to classify stage / progression. Regardless, small, singular phase 2 clinical trials in this indication are simply poor predictors of success, especially when subgroups begin to pop up.


Never trust companies where the CEO corresponds with investors, directly or indirectly, via a message board. The internet is a big and wonderful place. Much is written, much is fabricated, much is conspiratorial. But if you notice the CEO of your company taking time out to gossip about the merits of a blog post, then s/he is not focused on the right questions. This can sound contradictory, because having the CEO or CMO of a company engage you directly can sometimes feel empowering and reassuring. But it’s a bad sign.


And lastly: Stay away from biotechs who use the word “cure” in their slogans or their treatment brand names. This one is self-explanatory.


And that’s that.



* One way to tell if a trial has failed is the Nouveau Analysis Rule: Did you hear about a specific analysis for the first time on the day of the data release? If so, the trial has failed.