PharmAthene scraps Theraclone merger after feds nix funding

A few days after the feds left Seattle-based Theraclone Sciences high and dry of funds for its midstage study of an antiflu antibody, PharmAthene ($PIP) is now spreading the word that it is backing out of its planned merger with the biotech.

The Annapolis, MD-based biodefense company says it has decided to cancel a shareholders meeting tomorrow designed to seal the merger deal struck last summer. And the company says it will pay Theraclone a $1 million termination fee.

Back on Aug. 1, PharmAthene said it was welcoming a merger that would have left Theraclone CEO Clifford Stocks at the head of the combined organization. Theraclone, a 2011 Fierce 15 company, has a pair of antibodies in development for cytomegalovirus (CMV) and influenza, a field in which PharmAthene's government contracting experience may have helped. Investors in each company were to be given half of the combined company's shares.

Theraclone, though, was dealt a severe setback when the Biomedical Advanced Research and Development Authority, better known as BARDA, denied funding for a Phase II study of TCN-032 last week. The biotech is advancing a Phase IIa study for TCN-202, another antibody with potential for preventing human CMV after an organ transplant.

PharmAthene, meanwhile, has a pair of clinical-stage anthrax vaccines, including SparVax, now in midstage testing. The FDA recently lifted a clinical hold on SparVax, which had figured in a nasty legal brawl with Emergent BioSolutions over a $78 million contract. The FDA had sought more stability data on the vaccine when it called for the hold.

- here's the press release

Special Report: 2011 Fierce 15 - Theraclone Sciences