A Merck partner is sucked into the financial quagmire as key lender calls in a note
Another biotech standing on shaky financial legs has fallen victim to the bears.
Merck partner 4D Pharma has reported that a key lender, Oxford Finance, shoved the UK company into administration after calling in a $14 million loan they couldn’t immediately make good on. Trading in their stock was halted with a market cap that had fallen to a mere £30 million.
“Despite the very difficult prevailing market conditions,” 4D reported on Friday, the biotech had been making progress on finding some new financing and turned to Oxford with an alternative late on Thursday and then again Friday morning.
Subsequent to the suspension, the Board was informed that Oxford had today instructed that the Company be placed into administration, in accordance with the terms of the Facility. Accordingly, James Clark and David Pike of Interpath Advisory have been appointed as joint administrators to 4D pharma plc (the “Joint Administrators”). For the avoidance of doubt, the following wholly owned subsidiaries of the Company have not been placed into administration: 4D Pharma Research Limited, 4D Pharma Cork Limited, 4D Pharma León S.L.U. and 4D Pharma Delaware Incorporated.
It still hasn’t given up, though, with plans to look for a new path forward as a going concern.
Like a host of startups, the Leeds-based drug developer has seen its share price shrivel since the start of the year. Their stock $LBPS has plunged more than 70% since the start of the year.
Merck had been attracted to the biotech’s platform, aimed at creating what they called “live biotherapeutics” with an eye to developing new vaccines. 4D’s big idea has been centered on using single-strain bacteria from the gut to make new drugs.
4D lists 6 programs in the clinic:
- There’s Blautix in irritable bowel syndrome (IBS) which the biotech says completed a successful Phase II trial.
- A Phase I/II study of MRx0518 in combination with Keytruda (pembrolizumab) in solid tumors.
- A Phase II clinical trial of MRx0518 in combination with Bavencio (avelumab) in the first-line maintenance setting for urothelial carcinoma.
- A Phase I study of MRx0518 in a neoadjuvant setting for patients with solid tumors.
- A Phase I study of MRx0518 in patients with pancreatic cancer.
- And a Phase I/II study of MRx-4DP0004 in asthma.
Social image: Duncan Peyton, 4D CEO