GenVec’s board has agreed to liquidate and dissolve the struggling gene therapy developer, more than two months after reporting a 47% year-over-year drop in annual revenue last year.
If the dissolution plan is approved by shareholders, GenVec said, it plans to file a certificate of dissolution with the Delaware Secretary of State, complete a liquidation of company assets already under way, satisfy remaining obligations, and distribute any available liquidation proceeds to stockholders.
The board approved a dissolution plan on May 24 “after extensive and careful consideration of the company's strategic alternatives,” concluding that the plan “is in the best interests of the company and its stockholders,” according to an 8-K filing with the U.S. Securities and Exchange Commission dated yesterday.
“The company may abandon the Plan of Dissolution if the board of directors determines that, in light of new proposals presented or changes in circumstances, liquidation and dissolution pursuant to the Plan of Dissolution are no longer advisable and in the best interests of the company and its stockholders,” GenVec added.
Despite winning a conditional approval last June for a vaccine intended to treat foot-and-mouth disease in cattle, GenVec has largely struggled to develop successful gene therapy treatments. Two months later in September, GenVec cut 30% of its workforce, or 23 positions, to save cash, saying the reduction would allow it to fund operations through the third quarter of 2014, even without any milestone payments it may receive through an ongoing collaboration with Novartis. At the time, GenVec reported about $20.9 million in cash, cash equivalents, and short-term investments at the end of the second quarter 2012.
That number fell six months later to $15.3 million in cash, cash equivalents, and short-term investments as of the end of the fourth quarter, during which it lost $3.2 million, down from a $2.5 million net loss in Q4 2011, on revenues of just $1.5 million, down more than half from $3.4 million a year earlier.
GenVec ended 2012 with a 47% revenue loss down to $9.4 million, a slide the company blamed on year-over-year declines of $5.6 million in its hearing loss and balance disorders program, $1.5 million in its HIV program, and $1.2 million in its foot and mouth disease program.
The company in 2010 halted a Phase III trial for its lead drug for patients with locally advanced pancreatic cancer, TNFerade, after concluding that the trial would not meet the goal of demonstrating persuasive evidence of clinical effectiveness. GenVec then announced it would explore strategic alternatives that included a possible sale of the company.
Four years earlier in 2006, GenVec ended development of a peripheral vascular disease treatment in 2006, following its failure in a mid-stage trial.