Carbylan pulls pain drug trial, puts itself up for sale, cuts staff

Carbylan
(Nasdaq)

It’s dark days for Carbylan ($CBYL) as it looks for a buyout after halting a key Phase III pain drug trial--and announces that it will immediately cut nearly all of its staff. 

What a difference a year makes as last April, the Palo Alto, CA-based biotech raised $65 million through an IPO to fund late-stage trials of its experimental osteoporosis knee pain treatment.

The injectable Hydros-TA combines a corticosteroid with a viscosupplement, using a cross-linking formulation that aims to help toward short-term treatment of knee pain and long-term relief from chronic issues.

But in Feb., the company announced that its Phase III trial for the treatment hit one primary endpoint--but missed another, severely hampering its future prospects and its original plans to submit its injection to the FDA early next year.  

The biotech is now halting any further studies on the drug and said in a statement today that is it: “Actively pursuing a strategic transaction, including a merger or acquisition of the company. As previously announced, Carbylan has engaged Wedbush PacGrow to act as its strategic financial advisor for this process.”

Carbylan, low on cash, also announced an “immediate” cutting of 14 employees--it currently only has 17 in total--in order to “preserve capital and further streamline the company’s operations in preparation for a potential strategic transaction.”

Carbylan said it will have around $25-$30 million of net cash available for any deal, with the cuts and halting of its research helping to stop this from being lower.  

This follows a similar fate of several other biotechs this month, with Durham, NC-based Heat Biologics announcing it was cutting its workforce by a fifth and scaling back a key cancer trial, while the Cambridge, MA-based Bind Therapeutics also said it would ax 38% of its workforce this month and also seek to potentially sell the company.

-check out the release