After filing for bankruptcy, rejected migraine drug developer Zosano’s value more than halved
The devastations of the public markets and the repeated rejections handed down by the FDA have added up to a dim future for Zosano Pharma as it appears the 16-year-old biotech’s journey is coming to an end.
The Fremont, CA biotech filed for bankruptcy on Wednesday and is currently operating as a “debtor-in-possession” and intends to rid itself of “substantially all of its assets” over the course of the Chapter 11 case, Zosano said Thursday morning.
Those assets include a migraine drug that the FDA rejected in 2020, a Covid-19 vaccine delivered via a microneedle patch, an osteoporosis drug, cancer vaccines and various other prophylactic vaccines for kids and adults, according to Zosano’s website.
Zosano is one of a few biotechs to wind down operations during the past few months as the unrelenting public markets have wiped away vast amounts of value from many drug developers after a pandemic boom could no longer keep the industry on greener pastures. Flagship Pioneering-founded microbiome biotech Kaleido Biosciences shut down in April and Orphazyme sold itself through the help of the Danish courts last month.
It’s been a particularly tough few months for Zosano’s employees. The company laid off 31% of its workforce in March and then laid off another 37% just a month later, per SEC filings. And, further cementing a cloudy future for Zosano, the biotech’s clinical development and medical affairs VP Donald Kellerman left the company, effective June 1.
After getting the no-go from the FDA a few years ago for its potential migraine med, Zosano attempted to resubmit, but the FDA again had disagreements over the drug. In April, the agency gave the company a 12-month extension to resubmit the NDA for M207, but Zosano said that month that it would suspend the program to preserve cash.
As of April 26, Zosano had about $11.4 million in cash and cash equivalents and was working with financial advisor SierraConstellation Partners to figure out a future for its assets.