A late-stage disaster in biotech these days could trigger the trapdoor for small companies with limited pipeline prospects, as Celladon proved all too well.
When a Big Pharma drug crashes and burns, you can generally relegate it to a quick funeral and a quick hit to the share price. When a lead drug at a biotech goes under, it can be an extinction-level event.
So it's no wonder that a skeleton crew at Celladon ($CLDN) is now playing their last hand following the Phase IIb disaster for Mydicar, a gene therapy for heart disease that failed the primary as well as secondary endpoints.
Gifted with a breakthrough-drug designation at the FDA and some bullish forecasts (along with a 2012 Fierce 15 award), Celladon joined the wave of biotechs to go public over the last few years. Investors, urged on with a fresh appetite for risk, bought in early to the idea that inserting a functioning copy of the SERCA2a gene into heart cells could salvage declining hearts and improve pumping power.
It didn't. And now Celladon's survivors are determining if there's a possible sale or reverse merger in its future. Barring that, the final answer could well involve simple liquidation. Sometimes, your best option is distributing any cash that may be left over.
It's time to bury the dead and move ahead.
Special Report: FierceBiotech's 2012 Fierce 15 - Celladon
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