Posted on 27 Comments

Irreproducible Results Inc.

The press release went out at 1:05 p.m. on March 26, and heralded big things for OvaScience, a barely 3-year-old company based in Cambridge, Massachusetts, that is making quite a splash peddling a pair of seemingly revolutionary procedures to assist women struggling with conception.

The company, which didn’t exist five years ago outside of the ideas in a Harvard Medical School professor’s journal articles, touted its 53 percent success rate in one of the first fertility clinics offering its AUGMENT treatment, and appeared to have once again checked off a box on what has been a very fast track to success.

Indeed, by any yardstick, OvaScience’s first few years of existence should make any management team green with envy. Wall Street’s brokerage analysts are supportive of the company’s every move, investors had bid its share price steadily northward and national media provide a ready forum for management’s message.

At the center of it all is the Longwood Fund, a small venture capital outfit that raised the seed capital to get OvaScience launched. A pair of equity offerings
later, the fund’s three partners have a 19.5 percent ownership stake in the company currently then worth just above $185 million.

(Stripped down, AUGMENT is a procedure where mitochondria — the energy-generating organelles within a cell — are co-injected with sperm during an in vitro fertilization procedure called intracytoplasmic sperm injection, or ICSI. The company’s theory is that the mitochondria injected from the women’s ovarian lining stem cells stimulates eggs whose energy levels are diminished.)

From a business perspective, with a frantically motivated patient base and at a cost of up to $25,000 per treatment (in addition to the $10,000-$15,000 a patient can expect to pay to her physician for IVF), it’s clear AUGMENT could be potentially lucrative.

But a funny thing happened on March 27: As OvaScience’s chief executive officer, Michelle Dipp, began a conference call around 10 a.m., recounting what the company described as encouraging news about AUGMENT’s effectiveness, the company’s shares were beginning a price collapse that would see them drop nearly 10 percent on the day, or $4.82, to $43.47.

It was a long week indeed at Longwood’s offices on Boston’s Boylston Street, as the price collapse knocked almost $300 million of market capitalization off the stock, $58 million or so of which belonged to Dipp and her partners.


So what spooked investors?

A good place to start was OvaScience’s release itself. The company claimed that 17 women had received the embryo transfer and 9 became clinically pregnant for a 53 percent success rate. But reading the release more closely shows that 26 women got the treatment and, of them, 7 were able to maintain a pregnancy for slightly less than a 27 percent success rate.

Investors, it appears, drew a very different conclusion of what these results meant.

More important, given the absence of a control group, or a group of women who didn’t receive OvaScience’s treatment, discerning whether these results are troubling or promising is unknowable. Since it’s not a formal study, calculating results that might ordinarily depart from industry norms, like ignoring the full amount of women receiving the treatment, is perfectly feasible. The results can then be interpreted in a host of different ways which Dipp seized on, proclaiming at the end of the release: “Our AUGMENT treatment is having a positive impact on pregnancy rates in a variety of women who are struggling with infertility.”

Notwithstanding the difficulty posed by the absence of a control group, the Centers for Disease Control’s archive of assisted reproductive technology statistics suggests at least a broad idea of what the press release’s reported effects mean.

The median age of the women receiving OvaScience’s treatment in the Toronto clinic was 33, with an average of two previous IVF treatment cycle failures.

According to the CDC in 2012 — the most recent year available for data — of the women studied who were 35 and younger who failed two prior IVF treatment cycles and received IVF with fresh non-donor eggs or embryos, 33 percent were expected to deliver a live birth.

Digging further into CDC data, with the same conditions applying, for women between 35 and 37 years old, the figure is 28 percent; between 38 and 40 years old, it is 22 percent.

Source: CDC
Source: CDC

The lack of data would be odd for most companies touting a revolutionary treatment for one of humanity’s most vexing issues, but OvaScience is different: Its website lacks presentations from analyst days or investor conferences, there are no speeches from its executives or scientists and, per above, there are no formal studies.

One window into the OvaScience management team’s thinking is a recent article from quoting Dipp as saying, “The [fertility] industry just doesn’t do trials.” Additionally, Dipp indicated that the company — whose $60 million in cash was bolstered by a January offering that raised $132 million — readily cover the costs of any study — is unlikely to launch a trial in the near future as it is not in anything other than “a low-level ongoing dialogue” with the Food and Drug Administration.

It is no mean feat trying to reconcile what Dipp meant by “the fertility industry doesn’t do trials” with the fact that she is both a medical doctor and Ph.D. holder intimately familiar with both medical research procedure and the Food and Drug Administration regulations. To provide just one example, every physician prescribed oral contraceptive — and a host of other fertility assistance drugs — have been studied in formal scientific trials.

So why does a company with “Science” in its name apparently not want its own science put to the rigors of a formal scientific evaluation?

At one point OvaScience actually did (sort of) want that.

In September 2013, OvaScience announced that the FDA sent the company a letter informing them it was questioning their decision to pursue approval as a human cellular tissue product, or HCT/P, and instructing them to file an investigational new drug application. The FDA’s review process for a drug is vastly more thorough (as well as time-consuming and expensive) than what OvaScience had been seeking. In response, the company said it anticipated further discussions with the FDA, suspended its then-nascent U.S. study and began to look for international testing opportunities.

For investors, Dipp’s confirmation that for the foreseeable future the company will not have access to the affluent U.S. market probably did little for their enthusiasm.

This is not the first time Dipp and her Longwood partners, Christoph Westphal and Richard Aldrich, have been under the spotlight for launching companies whose heavily touted prospects have been called into question.

Frankly, it’s not hard to discern a pattern of sorts in how the Longwood trio handle their investments. Partner with high-profile researchers from prestigious institutions, incorporate with a mix of venture capital outfits and local celebrities, quickly cash out investors by going public, obtain fawning press coverage, leverage multiple underwritings into research analyst support, and in two instances discussed below, profitably sell the company before critical scientific flaws surface.

In April 2008, Christoph Westphal was then CEO of Sirtris Pharmaceuticals when he brokered a sale of the company to GlaxoSmithKline for $720 million. Two and a half years later, the giant British drugmaker shut down research into SRT501, the company’s primary drug that was being analyzed for the treatment of multiple myeloma, or cancer of the white blood cells. By 2013, all but a handful of Sirtris’s remaining employees had been let go.

Prior to the shuttering of the Sirtris unit, however, matters took a surreal turn.

In August 2012, Westphal and Dipp were caught using the Healthy Lifespan Institute, a nonprofit foundation they had set up the year before, to sell synthetic supplements that were broadly similar to the SRT501 drug (at $540 for a year’s supply) they sold to GlaxoSmithKline. The day after Dipp confirmed it to Xconomy, a Boston pharmaceutical and biotech industry news site, broke the news that GlaxoSmithKline ordered them to cease selling the supplement. The company did, however, follow through with its commitment to make an initial investment in Longwood.

Another deal brokered by the trio that proved painful for a major pharmaceutical company was the July 2010 sale of the Westphal and Aldrich-founded Alnara Pharmaceuticals to Eli Lilly for $180 million. The deal was all the more impressive in that Alnara’s primary drug, Liprotamase, had been licensed to the Cystic Fibrosis Foundation in 2009 when its developer Altus Pharmaceuticals couldn’t fetch any buyers. Less than a year later, in April 2011, the FDA rejected Liprotamase for its intended purpose of treating exocrine pancreatic insufficiency. Ultimately Lilly took a $205 million write down to discontinue these operations (this figure also includes discontinuation costs for another drug).


Concerns about the efficacy of OvaScience’s treatment program pale in comparison to the controversial history of the science — and scientists — behind the company.

OvaScience is based on the research of a pair of Ph.D.s, David Sinclair and Jonathan Tilly, former Harvard Medical School colleagues (Tilly has since become the chairman of Northeastern University’s biology department) whose research interests have combined stem cells and their fields of, respectively, aging and reproductive biology.

In August 2004, a Tilly-led research team published an article in Nature magazine that pointed to stem cells in female mice that potentially regenerated eggs after birth. The importance of the claim is difficult to understate. If it were replicated, his finding would turn accepted science on its ear, given the 50-year-old axiom that all female mammals, including humans, are born with their lifetime’s supply of eggs. A follow-up article one year later in the academic journal Cell described these ovarian stem cells as possibly residing in bone marrow and creating new eggs in as little as one day.

The articles kicked off an experimental frenzy as researchers on several continents sought to replicate Tilly’s findings.

Unfortunately for Tilly, they appear to have failed. What’s worse is that they began the reproductive biologist equivalent of a flame war, with a series of articles from fellow academics that took him to task for his conclusions.

The most potent criticism of Tilly’s work came from his then Harvard colleagues Dr. Amy Wagers and Dr. Kevin Eggan, whose research for a 2006 Nature article described their inability to induce a pair of mice — the test subjects for Tilly’s work — to produce more eggs.

The debate became so protracted that Nature wrote an editorial about it in 2006, summarizing the depth of skepticism about Tilly’s findings. To be sure, the editorial did note Tilly’s pointed objection to the Wagers/Eggan findings — that they did not precisely replicate his study — and that the egg count of the mice Wagers and Eggan worked on remained steady over time, as opposed to declining.

Dr. Roger Gosden, a recently retired co-author on the 2006 Wagers-Eggan paper, told the Southern Investigative Reporting Foundation that he stands by the research investigating Tilly’s claims.

“Nothing I have seen — and very few labs are doing this work — suggests that these eggs are regenerating,” Gosden said. “Even if [Tilly] was correct in some broad fashion, other labs surely would have seen seized that research foundation and built on it. That’s not the case.”

Gosden said the inevitable attention that Tilly’s hypothesis generated in the business and media worlds raised a great deal of hope among women who were desperate to conceive.

“If there isn’t proof of replicability for a claimed discovery or process, then the scientist has an obligation to note that, even though feelings are hurt.”

Another who disputes OvaScience’s scientific premise is former Jackson Laboratory scientist John Eppig, who like Gosden is a recently retired veteran of decades of reproductive biology research. “Within the reproductive biology community, there is very little support for what [Dr. Tilly] has asserted,” he said. “I suspect he misidentified [egg-like] cells that are not functionally reproductive.”

“There is also a broader question that needs to be answered from this work: Why do women go into menopause at all if there are these stem cells present?”

OvaScience’s other co-founder, Dr. David Sinclair, is no stranger to scientific controversy either. The first to theorize that Resveratrol — an organic compound found in the skin of red-wine grapes — might activate sirtuins, the proteins that influence cellular processes like aging and inflammation, his work became the framework for Sirtris Pharmaceuticals.

As noted above, while nothing short of a boon for Sinclair financially, the work proved highly controversial. In January 2010, researchers from Pfizer very publicly stated that it could not replicate any of Sinclair’s results from his original Nature paper; a month earlier, in December 2009, Amgen had more quietly challenged the very scientific premise of the drug.

When Nature magazine wrote a piece analyzing the criticisms of Dr. Sinclair’s theory, he was quoted suggesting that Pfizer’s chemists had made some elementary mistakes in attempting to replicate his work.

It would get worse: In 2011, Nature ran a study from the laboratory of MIT biology professor Dr. Leonard Guarente — Sinclair worked in Guarente’s lab prior to joining Harvard — that sharply reduced the estimates of theoretical life extension benefits from sirtuin to 10 percent to 14 percent from 15 percent to 50 percent.

Finally, as noted above, GlaxoSmithKline abandoned drug trials on Sirtris’ SRT501 in 2011, stating the drug “may only offer little efficacy” and could possibly worsen kidney problems.

Sinclair told the Southern Investigative Reporting Foundation that a series of papers he has released in the past several years, specifically one published in Science in 2013, have effectively cleared the matter up and “that the dispute you mention is no longer an issue among scientists.” Additionally, on the topic of Sirtris’ being shut by GlaxoSmithKline after clinical testing was halted, he said the company is fully engaged within the field of sirtuin research. (See here for the questions posed to Sinclair and his responses.)

The bitter criticism from both academic and corporate scientific colleagues sure hasn’t hurt either of their pocketbooks though: In the S-1 filing prior to OvaScience’s initial public offering, both professors were listed as owning 701,927 shares in addition to annual consulting deals. Tilly, who has resigned from the company’s board of directors, was paid $180,000 last year as a scientific adviser; the most recent proxy filing does not mention Sinclair’s name, but in response to the suggestion that his absence from the filings meant he had sold his stock, he said that the notion was “completely false.”

As detailed in Sirtris’ filings, Sinclair had a $150,000 per year consulting contract, was a board member and owned 242,000 shares, worth just over $5.4 million when the acquisition closed.


Over the course of two weeks in late March, repeated attempts were made by both phone and email to contact both Christophe Westphal and Michelle Dipp.

An OvaScience communications staffer, Cara Mayfield replied two days prior to publishing that the company “won’t be able to meet your timeline” and would not be replying to questions.

Dr. Jonathan Tilly did not reply to a pair of emails seeking comment.

Corrections: The original version of this story did not calculate the size of the Longwood fund (and its three partners) in OvaScience, nor its value, using the most recent documents. It is about 19.5 percent of the 27.12 millions shares outstanding, worth just over $185.2 million. The seven women in the Toronto test were clinically pregnant but have not delivered children. Additionally, a reference to the company’s cash position has been changed to include the announced proceeds from a January equity offering. The Southern Investigative Reporting Foundation regrets the errors.

27 thoughts on “Irreproducible Results Inc.

  1. What’s the point of the article? You could look at any scientists past and come up with stories where other academics don’t believe their research.

  2. I’m on to you “Southern Agenda” and so is any clear thinking person :
    Your little story is filled with inaccuracies, but you already know that. I also noticed a niece little anti-Semitic piece done on the part of “Southern our own agenda Assoc.” It is true anything with “Southern” and “Science” or “Stem Cells” in the same paragraph is sure to be total crap. God does not like your style. No one does; you are filthy hate-mongers.

  3. @StopHateGroups – You are awesome! Please keep posting. I am a bit confused, exactly who does the author hate? Hype artists like Dipp & Westphal? Scientific charlatans like Sinclair & Tilly? Yankees? And what is the “Southern Agenda”?

  4. Many of your sponsors, including, presumably, someone in your family, seem to be associated with the financial industry, especially hedge funds. Do any of these sponsors have a stake in what you write about, including Ovascience? In general, given that this is a financial blog, some of your sponsors suggest a conflict of interest, at least in the eyes of many in the journalism world.
    And do you have a rigorous editor or fact-checker? Are your stories vetted by an impartial party? I saw the posts on various boards decrying your bias (many, in an offensive way), but noticed today that there is one analyst who says the report contains “a number of inaccuracies” and “treads over old issues.”


  5. Susan,

    We address that issue in our “About us” tab:
    Let me be blunter (but hopefully not rude):
    1. No one ever sees our content before we publish, nor knows what or when we are publishing, apart from: myself, a copy-editor, a member or two of our BoD and our pre-publication review lawyers at Brooks, Pierce in Raleigh NC
    2. I have no idea what you discussing re: “many in the journalism world,” when most of MSM would die to avoid the “sacred cow” they face re: advertisers, political/cultural orientation of the audience et al.
    3. We do not take $$ from anyone who earns their living primarily as a short-seller; anyone who donates to us does not give us tips on stories.
    4. I wrote this story in ~ 3 days; editing, fact-checking took maybe 10-11 days. To be fair, I reported on a few other things, took care of some other stuff, but in the main, that’s about what it looks like.
    5. My parents, since you bring them up, are retired. Before that, Dad ran a hedge fund that was in an entirely separate line of work. My father is now directing the expansion of a large soup kitchen, near where I am from in Ct., and does not, at any rate, make fundamental short calls on stocks. We have no business dealings with each other.
    6. No one at SIRF (BoD, contractors, lawyers) have any economic interest, in any fashion, in what we write–ever. Please do note the amount of stories that have no investible component to them.
    7. My bias is that I try and write document-driven (solely) stories that are ignored by MSM because they are time-consuming, result in ample controversy and tell an overlooked/hidden truth about a company or person using public capital. Your suggestion that any brokerage research unit should give me pause is quite amusing.
    8. Assuming that there is no issue involved, I will take a tip from anyone about anything–as long as there are documents involved. About 90% of tips are dropped immediately.

    Thats about what you asked.


  6. Thank you for your reply. I do not agree with your generalities about MSM and its propensy to not investigate companies or business issues due to time or advertising constraints. I know a number of reporters where I am based who have spent weeks and months, not three days, on various stories. Although we may not agree on what MSM is. .. Personally I like the idea of rooms full of argumentative editors and journalists challenging every word on an intense story. Those layers of editing are safety nets. Your Ovascience story is so overwhelmingly negative that it suggests, well ….
    Nor would I be so quick to generalize about analysts, no matter how amusing you find my comment to be. It is at least worth looking into what they have to say, no? Or should we ignore them all?
    But thank you for explaining your methodology.

  7. Susan,

    The rooms full of argumentitive editors and writers are largely a thing of the past–quite sadly so. As SIRF notes in its About Us tab, nowhere has the media collapse fallen harder than on investigative units or roles. I teach both investigative reporting to undergrads and present skill lectures to professionals at Investigative Reporters and Editors (IRE) conferences and see this cost quite directly.

    If it matters, I have never encountered a legal pre-publication review so thorough as SIRFs.

    There is a misunderstanding: I spent six weeks plus full time reporting on it but three days writing it. I took a literal approach to your question.

  8. Seems all high ranging firms have strong buys on this! experts in their field. what makes you an expert that made you do this article with such negativity. have you done expert analysis on the company over 11 analyst have buy ratings and have done extensive research. have you meet with the company or dealt with management?

  9. your writing is one sided, how about getting the analyst view points who strongly disagree with your expert opinion! Oppenheimer Maintains Outperform on OvaScience Inc Following Management Meetings:

  10. Mr. Desimone,

    Thanks for writing: please read the conclusion of the article where I documented my attempts to contact them.

  11. so you are unable to get contact them so your research was not fully complete! have you contact any of the clinics? doctors involved? or patients? LONG OVAS based on many brokerage firms recommendation who are experts in the field and have meet with company

  12. also have you spoked to any of the analyst? they much insight into OVAS

  13. @Thomas – All things being equal, Mr. Boyd alleges several attempts to contact these parties were made. I say “alleges” as I have no way of confirming these claims and should not to be misconstrued as an indictment on Mr. Boyd’s veracity.

    It is common practice to seek comment from subjects. Whether they respond, or not, is immaterial as they often cannot or will not. If a story could not, legally, be published without comment from the story’s subject(s), then they would merely use that as a tactic to kill the story by not commenting.

  14. I added a link to the OvaScience official’s declined to comment in the story. As noted, I made a series of calls and sent emails to both the two spokeswomen as well as Dipp and Westphal from the Longwood Fund.

  15. @Mike their other ways to research including interviewing test subjects? doctors? clinics? analyst? major shareholders? does this writer have the credentials to validate the accuracy of a one sided attack? always two side to a story! let him do a follow up with all the analyst who have strong buys on OVAS including Oppenheimer who MEET with the company and Maintains Outperform on OvaScience Inc Following (RECENT) Management Meetings: and other reputable firms who rate it a BUY

  16. 90% success rate – 5-star analyst Rohit Vanjani from Oppenheimer maintained a BUY on $OVAS. Rohit has a 81% success rate:

  17. also did you interview? is this not success? “Robert F. Casper, M.D., F.R.C.S.(C), Medical Director of TCART Fertility Partners of Toronto, Canada, a mitochondrial expert and one of the first IVF specialists to use the AUGMENT treatment in clinical practice, reported initial patient experiences in women whose ages ranged from 28 to 40 years and who had one to three previous failed IVF cycles, often with poor embryo quality. In 26 women who received the AUGMENT treatment, there were 9 clinical pregnancies1 out of 17 embryo transfers (53%).2 ”

  18. how about! some more insight. look at board below!
    Longwood fund (and its three partners) in OvaScience, , using the most recent documents. It is approximately 19.5% of the 27.12 millions shares outstanding

    Strategic Advisory Board

    James Foster
    Chairman of the Board, President and Chief Executive Officer of Charles River Laboratories

    Wyc Grousbeck
    Managing Partner and CEO of the Boston Celtics

    John Henry
    Principal owner of The Boston Globe, Boston Red Sox and Liverpool Football Club, and co-owner of Roush Fenway Racing, Investor: Sirtris (NASDAQ: SIRT, now GSK), OvaScience (NASDAQ: OVAS), Flex Pharma (NASDAQ: FLKS)

    Peter Hutt, LLB, LLM
    Former FDA GC, SAB: Sirtris (NASDAQ: SIRT, now GSK), Alnara, OvaScience (NASDAQ: OVAS), Flex Pharma (NASDAQ: FLKS), BOD: Momenta (NASDAQ: MNTA)

    Rod MacKinnon, PhD
    Nobel Prize, Co-Founder Flex Pharma (NASDAQ: FLKS), Rockefeller University

    John Maraganore, PhD
    CEO Alnylam (NASDAQ: ALNY)

    Brian McVeigh, CPA, CMA, CLP, MBA
    GlaxoSmithKline, Vice President, WWBD Transactions and Investment Management

    Richard Pops
    Chairman and Chief Executive Officer Alkermes (NASDAQ: ALKS), BOD: Sirtris (NASDAQ: SIRT, now GSK)

    Paul Schimmel, PhD
    NAS, Scripps, Co-Founder Alnylam (NASDAQ: ALNY), Momenta (NASDAQ: MNTA) and Sirtris (NASDAQ: SIRT, now GSK)

    John Sculley
    Former President Pepsi, Former CEO, Apple, Investor: Flex Pharma (NASDAQ: FLKS)

    Phil Sharp, PhD
    Nobel Prize, Co-Founder Biogen and Alnylam (NASDAQ: ALNY), NAS, SAB: Sirtris (NASDAQ: SIRT, now GSK), Verastem (NASDAQ: VSTM)

    David Sinclair, PhD
    Harvard, Co-Founder/SAB Sirtris (NASDAQ: SIRT, now GSK), OvaScience (NASDAQ: OVAS)

    Moncef Slaoui, PhD
    GlaxoSmithKline, Chairman R&D

    Henri Termeer
    Former Chairman, President and CEO Genzyme, BOD: Verastem (NASDAQ: VSTM)

    Chris Walsh, PhD
    Harvard, NAS, Genzyme, SAB: Sirtris (NASDAQ: SIRT, now GSK), Verastem (NASDAQ: VSTM), Flex Pharma (NASDAQ: FLKS)

  19. Yes, and I happen to work in one of those rooms full of argumentative journalists. This story is too unrelentingly negative to be trusted.
    Nice lede, though.

  20. You should do some investigative research on the proven biases and poor track record of stock analysts. First, most of these guys have no credentials to evaluate science at all. Second, their job is twofold: sell stock and keep underwriting business flowing. Writing critical and searching analysis – much less being accurate – is not really what they get paid for.

  21. It does seem like the work of a raving lunatic but I have a feeling it is more likely an owner of OVAS with a sense of humor trying to discredit Mr. Boyd.

  22. I am still thinking through the specifics of the story. That said, the investment climate for much of the publicly traded smallcap biotech space reminds me of a Buffettism:

    “A fool and his money will soon… be invited everywhere!”

  23. I did a bit more digging. Sinclair has more of a reputation for being a promoter than for being a scientist (to put it politely).

    It may have been prudent, or at least amusing, for Mr. Boyd to have contacted some of the research analysts (or perhaps it would make a better follow up piece?), but overwhelmingly his research and analysis seems to be on the mark.

    Some of the comments on here are remarkably naïve. Oh well, I am sure the posters will get invitations to invest in ‘hot’ companies like this at some point.

  24. Look people, if you don’t like the article and disagree with his premise – stay on the sidelines or go long on the stock.

    I’m quite sure the author has spent more time looking at the company that any of the random people commenting here. Do you own due diligence if you are unsatisfied with the article. The author is charging no fees for you to read his research.

  25. By that logic… your comment is too negative, therefore you cannot be trusted… 🙂

  26. Past success rate is irrelevant just like the “5-star” rating. It’s the data that determines who’s right or wrong. So far, there’s no conclusive evidence about the effectiveness of Ovascience treatment. I do applaud the company for scheduling control trials in Spain this year, so we’ll find out soon enough whether the hype was warranted. Investors seem to be skeptical at this point.

  27. It’s been over a year since this article was published, and the stock price collapsed from $33.46 on that date (4/6/15) down to $6.81 today. And since the company just did a new offering at $7.00 a share, those who were buying at the high prices got burned.

    It’s interesting that there were plenty of attacks impugning Roddy Boyd’s motivations and rude comments like “What’s the point of the article?”, but interestingly no one actually refuted anything in the article or showed where he was wrong.

    This should be a lesson for all investors: you may be invested in a company, but you need to listen when an investigative reporter shows you countervailing information. Otherwise you could get left holding the bag a year later.

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