Celladon said today it will lay off about half of the roughly 17 employees it spared from the axe just last month, and will suspend further R&D on its cardiovascular gene therapy agent Mydicar® (AAV1/SERCA2a) and other preclinical programs, including its membrane-bound form of stem cell factor (mSCF) gene therapy and SERCA2b small molecule programs.
The troubled company also said it was “aggressively” proceeding with earlier-disclosed plans to seek a merger or sale.
Celladon has been in retrenchment mode since its April 26 disclosure that Mydicar failed the Phase IIb CUPID2 trial for systolic heart failure by failing to meet its primary and secondary endpoints. Mydicar was designed to work via infusion of the gene for the SERCA2a enzyme into the coronary arteries, where it was to restore SERCA2a enzyme production in cardiac cells to improve heart muscle contractions.
Also suspended by Celladon was a preclinical program to develop small-molecule modulators of the SERCA2b enzyme, designed to correct the accumulation of unfolded proteins in the endoplasmic reticulum, known as ER stress, and underlying calcium dysregulation. Last year, Celladon granted Servier an exclusive option to license outside-the-U.S. rights to the SERCA2b modulators program.
Celladon also stopped work on mSCF, which the company has said has applications in several disease areas, particularly cardiovascular conditions and diseases.
On May 14, Celladon said in a regulatory filing that its board of directors approved an approximately 50% reduction of its workforce of 34 full-time employees “in order to reduce operating expenses and conserve cash resources.”
Today, the company said it will carry out a second reduction in its workforce, with about half of the employees who were not previously notified of termination “expected to depart in the third quarter.”
Celladon said it expected to offer further updates “in the coming quarter” on its efforts toward a merger or sale. Those efforts, the company said, “could include the sale of the company or some or all of its assets, and/or a liquidation and distribution of the remaining cash to its shareholders.”
“If we are unable to identify a merger or sale that provides superior value to our shareholders, we will move forward with a liquidation and distribution of net cash to shareholders,” Paul Cleveland, Celladon’s president and CEO, said in a statement. Cleveland took over as CEO in May, succeeding Krisztina Zsebo, Ph.D., who resigned after holding the position since 2004. Also resigning last month was a board member, Patrick Y. Yang, Ph.D.
“Our board of directors has unanimously determined that seeking a merger or sale, in lieu of further development of our remaining programs and assets, gives us the best opportunity to maximize shareholder value. We are aggressively pursuing that course,” Cleveland added.
Celladon projected that it could distribute “approximately $25-$30 million” in net cash to shareholders were the company to liquidate during the third quarter of this year.
Today’s retrenchment announcements by Celladon sent its share price tumbling 43%, to $1.26, in premarket trading this morning as of 8:57 a.m. The company’s share price has lost 95% of its value from a high of $27.26 on March 19.
On June 1, Celladon said it had retained Wedbush PacGrow Healthcare as its exclusive financial advisor, while its board approved a strategic plan to pursue an acquisition or partnership.
