California-Based KaloBios Pharmaceuticals Announces Shut Down
The company announced they will be discontinuing trials for lenzilumab, and they have already secured the services of a restructuring firm – The Brenner Group – to help close the business and liquidate its assets.
November 17, 2015 | by Sarah Massey, M.Sc.
Representatives from KaloBios announced Friday that they are beginning the process of closing the company’s doors and liquidating their assets. The press release comes less than two weeks after the company announced a series of disappointing clinical trials.
On November 5, the company said it planned to lay-off 61 percent of its San Francisco-based employees, and begin restructuring the organization. KaloBios also said they were considering selling the company.
Seventeen of the company’s employees were let go in order to free up some capital to continue development of lenzilumab – also known as KB003 – which was a potential therapy for chronic monomyelocytic leukemia (CMML). The compound – an anti-GM-CSF antibody – was originally developed as an asthma treatment, but it was not found to be effective at treating the condition.
The company has already received orphan drug status for lenzilumab by the US Food and Drug Administration (FDA), and a Phase I clinical trial was expected to commence before year’s end. The company announced they will be discontinuing trials for lenzilumab, and they have already secured the services of a restructuring firm – The Brenner Group – to help close the business and liquidate its assets.
According to representatives for KaloBios, the company has repaid approximately $6.6 million to loan broker MidCap Financial, leaving them debt-free to the firm. “Recent discussions around a number of possible strategic transactions have ended and as a result, the company believes it is highly unlikely that continuing to explore strategic alternatives could generate a viable transaction within the time frame allowed by our limited cash resources,” commented Herb Cross, chief financial officer and interim chief executive officer.
KaloBios was founded in 2000 and had several partners including Novartis and Sanofi. In the summer of 2014, Sanofi ended their deal with the company, leaving with single-digit royalties on sales of their joint venture, KB001-A – a monoclonal antibody designed to target Pseudomonas aeruginosa, and treat pneumonia.
In January of this year, the company’s president and chief executive officer, David Pritchard retired, leaving his seat on the KaloBios board of directors. Around the same time, the company shifted its focus from pulmonary research to cancer treatment.
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Keywords: Pharmaceutical Company, Orphan Drug, Clinical Trial
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