Ariad Pharmaceuticals' October fall from grace has wiped almost $3 billion from the company's market cap, and now the beleaguered drugmaker is putting on hold its plans to move into a built-to-suit new headquarters in Cambridge, MA's biotech hub.
Everything was in place for Ariad ($ARIA) to occupy into a state-of-the-art, 386,000-square-foot space in Kendall Square, shouldering up to the likes of Biogen Idec ($BIIB) and Novartis ($NVS) in the area's en-vogue hotbed for innovation. Now, Ariad has pushed pause on construction, The Boston Globe reports, indefinitely pushing back its scheduled 2015 ribbon-cutting.
Ariad isn't saying whether it plans to back out of the 15-year lease it signed for its would-be headquarters, and if it does, the Globe's local real estate sources say the company could get saddled with a cancellation fee in the tens of millions of dollars. Ariad never disclosed how much it planned to spend on the relocation, but it raised about $310 million in a stock offering shortly before signing the deal.
That, of course, was back when Ariad was excitedly working to expand the indications of its blockbuster-hopeful leukemia drug Iclusig, before waves of bad news whittled down the company's value and put its future in serious doubt.
On Oct. 8, Ariad revealed that the FDA imposed a partial hold on enrollment in a study of Iclusig after investigators charted an alarming rate of blood clot development among patients in the treatment arm, a revelation that slashed the company's stock price by about 80%. Not two weeks later, Ariad slammed the door on that trial, taking another 30% off the top of its already ailing shares and spurring analyst speculation on just how the biotech should proceed.
Meanwhile, ireful investors are queuing up in shareholder suits against Ariad, and some are questioning whether a drug deemed too dangerous for a controlled clinical study is safe enough to be sold. For its part, Ariad hasn't divulged its plans for the future, saying only that it's keeping its options open with respect to partnering or licensing.
- read the Globe story