Phase I safety scare costs TetraLogic a $25M fundraise

A serious safety snag forced TetraLogic ($TLOG) to halt enrollment in a Phase I hepatitis B trial for its lead drug, pulling the plug on a planned public offering.

The Malvern, PA, biotech hit the brakes on an ascending-dose Phase Ib/IIa ​hepatitis B trial for birinapant after observing cranial nerve palsies in the first dosing cohort. In a terse statement, TetraLogic divulged little else about the issue beyond saying that the pause is temporary.

The news sent TetraLogic's shares down more than 30%, which blew up the biotech's plans to raise $25 million in a public offering. TetraLogic had priced 6.25 million shares at $4 earlier this month, but, after birinapant's safety fallout, the company called off the plan altogether.

Birinapant remains in development for its primary indications in blood cancers and solid tumors, the company said, including a combination study with Merck's ($MRK) PD-1 inhibitor, Keytruda. And, thanks to its $13 million buyout of Shape Pharmaceuticals last year, TetraLogic has a second clinical candidate currently in Phase II for early-stage cutaneous T-cell lymphoma.

TetraLogic pulled off a down-sized IPO in late 2013, clearing just $50 million after setting out to raise more than twice that.

- read the safety statement
- here's the offering announcement