March 16, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Struggling Canadian biotech Amorfix Life Sciences Ltd. said in a statement Monday that its board of directors has formally authorized the firm to review all strategic alternatives available to it, including a possible sale of all of its assets, as it attempt to find ways to fund its early stage trials and tempt new suitors into partnering with the company.
Amorfix also said it has had “numerous discussions” with potential investors in recent months, all of whom were leery of investing in a “public biotechnology company at an early stage of the company’s progress toward clinical trials.” The firm, which makes diagnostics and therapeutics for misfolded protein diseases, in particular neurodegenerative diseases, said it is now going public with its search for new partners, or even acquirers.
Attempts to shore up the company’s coffers with equity financing and even loans have not worked either, said the biotech’s management Monday.
“The Board of Directors fully appreciates that the Company’s limited cash resources and liquidity constraints has affected the Company’s ability to maintain operations in the future,” said William Wyman, chairman of Amorfix. “We had hoped to address that situation with additional debt or equity financings of the Company, but have been unable to do so. As a result, Amorfix will consider selling all or a portion of its assets or consider other strategic alternatives to further develop its neuro-biological and other scientific initiatives and maximize long-term shareholder value.”
Amorfix said it is committed to holding on to the rights to its core neurodegenerative disease assets for ALS and Alzheimer’s disease “until one or more strategic transactions are consummated.” For ALS, these assets include therapeutic antibodies that block misfolded SOD1 and a simple blood test diagnostic for early detection of the disease. For Alzheimer’s disease, the company has developed a ‘best in class’ diagnostic that can accurately identify patients with early-stage disease.
As such, Amorfix said its board of directors will now consider “any and all strategic proposals,” including proposals that would transfer the company’s assets into a privately held entity. Amorfix said it would like shareholders to retain some equity, but added it would not rule out any alternatives.
“I regret that the Company has not yet been able to raise sufficient funds to execute our intended business plan,” said Robert Gundel, Amorfix president and chief executive officer. “However, I continue to believe that there is vast potential surrounding the Company’s development of diagnostic and therapeutic technologies that, if leveraged properly, could have a significant impact on the detection and treatment of multiple diseases and result in shareholders receiving a reasonable return on their investments.”
BioSpace Temperature Poll
After Amgen Inc. said last week that it will close its South San Francisco facility acquired during its $10 billion buyout of Onyx Pharmaceuticals and will lay off 300 of Oynx’s 750 workers, BioSpace is wondering—will the number of mergers and acquisitions completed in 2014 mean a “streamlining” of biotech jobs in the Bay Area? Tell us your thoughts.
