What we said: With a well-respected team of biologists on board, we predicted Avalon would be one of the few companies to survive the high-throughput screening field. Under the leadership of Human Genome Sciences' alum Kenneth Carter, Avalon was well on its way to building a strong portfolio of cancer drug compounds to complement its technology platform.
What happened: With several early-stage programs in its pipeline, Avalon Pharma went public in 2005, selling 27 million shares at $10.50 each. Things were going well for the developer, when in 2007 the company landed a $200 million dollar deal with Merck to identify cancer drug compounds. But like many biotechs, Avalon found itself struggling to raise cash over the last couple of years. Last August, unable to garner funds or a buyer, the developer cut its staff down by about a third to 35 employees and halted development of one of its cancer therapies.
Avalon eventually obtained much-needed capital in a $10 million acquisition deal with Clinical Data of Newton, MA. The acquisition was completed in late May. But not before the company's agreement with Merck, which had gone sour, was terminated. Although Avalon contended that it should have earned at least $8 million in the deal, Merck had not made any payments to the company during their two-year long partnership besides the final $4 million the drug giant paid to end the deal.
Unfortunately for Avalon, Clinical Data is now struggling to fund its acquisition and its own operations. Clinical Data said in May it does not have enough capital on hand to operate beyond December.
View the original Fierce 15 of 2003 report.