Turn out the lights, the party is finally over at KaloBios. The failure-prone biotech--which launched with a repeated reassurance to investors that developing antibodies had become a lot easier--says that after a brief look at alternative scenarios the best next step now is to wind down operations.
The South San Francisco-based company, which recently laid off 60% of 28 staffers, will hand over the assets for the Brenner Group for liquidation, with the remaining employees headed for the exits. That means that KaloBios' last clinical program, a Phase II study of KB004 for hematologic malignancies, is being discontinued. An early-stage study of KB003 for chronic myelomonocytic leukemia is also being scrapped.
KaloBios shares, already in penny stock territory, were down 55% in premarket trading this morning. Shares are trading at 50 cents.
"Recent discussions around a number of possible strategic transactions have ended, and as a result, the company believes it is highly unlikely that continuing to explore strategic alternatives could generate a viable transaction within the time frame allowed by our limited cash resources," said Herb Cross, the CFO and interim CEO, after the markets closed on Friday.
|Former KaloBios CEO David Pritchard|
The past two years have been marched with a steady drum beat of disaster for KaloBios, which raised $90 million in its IPO and once struck a $290 million collaboration deal with Sanofi ($SNY). The pharma giant was lured in by the prospects of a cystic fibrosis drug, but just months after Sanofi cut and ran from the deal the biotech conceded that their study had failed. That forced the biotech to scrap the program, its second failure, while trying to regroup around its remaining antibodies.
KaloBios founding CEO David Pritchard, though, never could right the ship, and later exited KaloBios, leaving it to its demise. KaloBios is a 2009 Fierce 15 company, offering another cautionary tale to an industry that has seen repeated failures of biotechs, including Celladon and Regado, over the past year. Biotech may have had a big overall upside for investors in recent years, but failure is dealt with harshly.
- here's the release
Special Report: 2009 Fierce 15 - KaloBios