After selling a failed Cerulean for scrap value, the executive team wins a bonus reward
By the end of the third quarter last year, Cerulean had burned through close to $196 million without much to show for it. The 2014 IPO floundered, despite the sizzling boom biotech was experiencing. But that wasn’t too surprising as their lead nano drug failed a Phase IIb trial for non-small cell lung cancer.
Then the same drug failed again last year, for renal cell carcinoma, and the Waltham, MA based company was doomed. The CEO struck a partnership deal with Novartis, but netted only $5 million upfront. So now the company is being sold for parts. The lead, CRLX-101, was wrapped up with its only other drug, the early stage CRLX301, and sold to NewLink for only $1.5 million. Novartis picked up the pipeline tech for a mere $6 million, a rounding number for the pharma giant. A few legacy staffers in the handful who are still left will get job offers.
Daré Bioscience gets the public shell in a reverse merger, with some remaining equity for the investors.
But even catastrophic failure can earn a reward. The executive crew at Cerulean, among the final survivors, each get a cash bonus approved by the board on March 19, according to documents filed with the SEC. The bonuses replace the retention agreement the board signed off on last November 8, when they agreed to hand over 3.5% of the value of the company at any subsequent change of control — at a time when the writing was on the wall.
CEO Christopher Guiffre gets $125,525.63.
CFO Gregg Beloff gets $51,276.81.
Chief Medical Officer Adrian Senderowicz gets $104,732.57.
General Counsel Alejandra Carvahal gets $78,573.29.
The board will determine the final bonus amount after the reverse merger is complete.
Infinity Pharma stirred up a short-lived ruckus when it lined up retention bonuses after a disastrous setback last year. The controversy simmered down after reporters learned that all surviving staffers could earn a retention bonus for staying with the troubled biotech. There’s no word about any bonuses for the rank and file who stayed on past the first layoffs at Cerulean, or the November reckoning with the board.