KaloBios said it will shut down operations, a week after saying it would lay off 61% of its workforce—17 employees—and had begun “evaluating strategic alternatives” including a possible sale of the company.
The company said it has engaged The Brenner Group to lead wind-down efforts that will include a phase out of the remaining 11 employees over the next 30 to 60 days.
KaloBios said it repaid in full an outstanding approximately $6.6 million secured loan obligation to MidCap Financial, a secured lender to the company—but will not be able to file a quarterly Form 10-Q “primarily due to resource constraints.”
“Recent discussions around a number of possible strategic transactions have ended,” Herb Cross, KaloBios’ CFO and interim CEO, said in a statement Friday after the close of the markets. “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.”
KaloBios said it would end its two clinical programs: KB004, an anti-EphA3 monoclonal antibody that had begun a Phase II study for blood cancers, and lenzilumab (KB003), an anti- granulocyte-macrophage colony stimulating factor (GM-CSF) monoclonal antibody which was set to begin a Phase I study later this year in chronic myelomonocytic leukemia.
Just last week, KaloBios said it would “pause” its Phase II cohort expansion phase of an ongoing clinical study of KB004 in four hematologic malignancies—Myelodysplastic Syndrome, MDS, Myelofibrosis, MF—and would focus its resources on lenzilumab.
The layoffs and search for alternatives announced on November 5 followed a series of clinical setbacks, each resulting in significant drops in KaloBio’s share price. In January 2014, lenzilumab failed a Phase II trial for severe asthma by missing its primary clinical endpoint of improvement in forced expiratory volume in 1 second (FEV1) compared to placebo.
Six months later in July 2014, KaloBios disclosed the end of its up-to-$290 million collaboration launched in 2010 with Sanofi to co-develop Phase II-stage antibody fragment KB001-A for treating or preventing Pseudomonas aeruginosa (Pa) infections.
Sanofi was one of two big pharmas to partner with KaloBios since it was established in 2000 to develop monoclonal antibody therapies; the other was Novartis, which in 2007 inked a nonexclusive license to the company’s Humaneered® technology.
In January of this year, KaloBios acknowledged that KB001-A failed to meet its primary endpoint of increased time to need for antibiotics for worsening respiratory tract signs and symptoms in a placebo-controlled Phase II study of Pa lung infections in patients with cystic fibrosis.
Also in January, president and CEO David W. Pritchard retired immediately, followed days later by the termination February 3 of CMO Nestor A. Molfino, M.D., as part of a restructuring that eliminated “more than 20%” of the company’s workforce at the time; KaloBios employed 35 as of December 31, 2014.
As of its last quarterly report, filed August 10 for the second quarter, KaloBios acknowledged an accumulated deficit of $193.875 million. The company had never advanced any of its compounds all the way to market approval.