Sangart goes MIA after burning through $260M-plus on R&D

Sangart CEO Brian O'Callaghan

San Diego-based Sangart has gone missing in action after apparently burning through more than a quarter-billion dollars of Leucadia National cash. About all that its sole big investor will do is point to financial reports stating they've cut off their commitment to provide financial support to Sangart after the last big trial ended in failure and that company execs have been scouting for a fresh source of financing.

Rumors about the company have been floating for days in San Diego after its website went dark. No one answers the phone at the company, the phone directory won't connect to at least two of the executives who had helmed the biotech and company CEO Brian O'Callaghan declined comment when contacted by FierceBiotech via email about Sangart's status.

Sangart reported a whopping $50 million round back in the spring of 2012, when Leucadia brought the biotech's total raise to $280 million over 15 years. Leucadia reported in its latest annual report filed in early 2013 that it owns 97% of Sangart after investing the vast majority of the funds used by the biotech. The last batch of cash was used to pay for a Phase IIb study for MP4OX, a rescue therapy aimed at transporting oxygen to tissue at risk of ischemia triggered by hemorrhagic shock. It was designed to be delivered to blood transfusions delivered to trauma patients.

According to Leucadia National's latest Q2 report as well as its annual report filed with the SEC, MP4OX failed the mid-stage study with 316 trauma patients. The drug flunked the primary endpoint: "a statistically significant improvement in the number of patients discharged and alive after 28 days as compared to the control group that received normal standard of care treatment. But clinically significant improvements were observed in some other measures of efficacy and no significant safety concerns were identified."

The biotech was looking to other sources for a "substantial" amount of cash needed to carry on, but the financial statement made it clear Leucadia would not be providing the money.

"In recent years, substantially all of the funding needed for MP4 development has come from the Company," states the Leucadia filing. "Significant additional funding will be needed prior to regulatory approval and commercial launch; we are not committed to provide such funding and Sangart is currently exploring potential external sources of funding and support. We are unable to predict when, if ever, it will report operating profits for this segment."

Sangart also had a sickle cell therapy in the clinic. Using the same platform technology, Sangart had developed MP4CO to deliver carbon monoxide to cells in a way that would prevent cell death and thwart inflammation. Leucadia's annual report notes that that program completed a successful Phase Ib.

O'Callaghan was brought in to reorganize the company 5 years ago. He told FierceBiotech last year that a successful trial would set the stage for a late-stage effort and open the door to building a new manufacturing facility in Ireland. 

Leucadia National CFO Joe Orlando did not immediately return a message from FierceBiotech

Special Report: The Top 15 Biotech Venture Investments in H1 2012 - Sangart