Struggling Eleven Bio Explores Sale of the Company

Struggling Eleven Biotherapeutics Explores Sale of the Company August 12, 2016
By Alex Keown, BioSpace.com Breaking News Staff

CAMBRIDGE, Mass. – Shares of Eleven Biotherapeutics have jumped nearly 12 percent this morning after the company released its quarterly reports which includes a note that executives may look to sell the company or some of its assets as an answer to recent financial issues stemming from two failed drug trials.

In its quarterly report, which included a note about strategic alternatives, was an item about a possible company sale, as well as entering into strategic partnerships or the sale of some assets not involved in a recent deal with Roche. Another option the company could consider is a distribution of all or a portion of payments Roche will make to the company under the license agreement struck in June.

Eleven and Roche entered into a $270 million deal to develop Eleven’s experimental EBI-031 treatment for eye-related diseases, such as diabetic macular edema and uveitis. EBI-031 is a humanized monoclonal antibody that binds Interleukin-6 (IL-6) and inhibits all known forms of IL-6 cytokine signaling. EBI-031 was designed for intravitreal delivery using Eleven Biotherapeutics’ AMP-Rx platform. The drug blocks both free IL-6 and IL-6 complexed to the soluble IL-6 receptor.

Under the agreement Eleven will be entitled to an upfront payment of $7.5 million, along with potential future milestone payments of up to $262.5 million. The first potential future milestone payment of $22.5 million, is subject to the effectiveness of an investigational new drug application for EBI-031, which was filed with and accepted by the U.S. Food and Drug Administration.

For the past year, Eleven Biotherapeutics has struggled with the failure of two experimental therapies. On Jan. 10, the company announced that its Phase III clinical trial of EBI-005 (isunakinra) for severe allergic conjunctivitis did not meet its primary endpoint. That was the second time EBI-005 failed to live up to expectations. In May 2015, the company reported that EBI-005, this time being studied for the treatment of moderate to severe dry eye disease, failed to prevent damage to the cornea or reduce eye pain in comparison to the control group.

With its failed drug trials, Eleven Biotherapeutics’ stock has struggled, to say the least. Since the January failure of EBI-005, shares of Eleven have struggled to rise above $1 per share, earning the threat of delisting from Nasdaq on March 3. However, over the past couple of months, shares of Eleven have steadily risen following the agreement with Roche and a round of layoffs to a high this morning of $4.83 per share.

In its report, Eleven showed revenue of $300,000 for the three months ended June 30, compared to $100,000 for the same period in 2015. The company said a net loss to shareholders was $6.5 million during the same time period. Eleven said it has approximately $8.5 million in cash and cash equivalents, which it believes combined with the first payment from Roche, will be sufficient to fund operations through 2017.

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