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Axovant Falls Back to Earth

Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

Remember Axovant Sciences, Exhibit A in last year's biotech bubble? Its story is deflating, metric by metric.

Axovant, the biotech creation of 30-year-old hedge-funder Vivek Ramaswamy, was last year's most controversial health care IPO, perhaps. It miraculously turned its $5 million purchase of an abandoned GlaxoSmithKline Alzheimer's drug into a valuation of nearly $3 billion on the day after its IPO in June.

For some, Axovant's IPO represented a brilliant fleecing of a sluggish pharma giant by a wunderkind upstart. Others saw the episode as proof positive that biotech valuations had massively over-inflated.

Axovant critics got vindication in the months after its IPO; yesterday, shares were down 40 percent from their post- IPO peak on doubts about the company and the broader sector it inhabits. Critics got more ammunition today, with the news that Pfizer had abandoned a phase two trial for an Alzheimer's drug extremely similar to Axovant's Alzheimer's offering (Axovant is also...