Gri­fols once paid Ar­a­digm $26 mil­lion for a stake in its in­haled an­tibi­otics. But with Ar­a­digm now in bank­rupt­cy, the Span­ish drug­mak­er is dish­ing out a fi­nal $3.2 mil­lion to buy it all.

The fire sale — which comes one year af­ter Ar­a­digm filed for Chap­ter 11 fol­low­ing a reg­u­la­to­ry tri­fec­ta for dis­as­ter — will see Gri­fols ob­tain as­sets and IP to Apul­miq (for­mer­ly Pul­maquin and Lin­haliq in Eu­rope), Lipo­quin and free ciprofloxacin. In ad­di­tion to waiv­ing its claims in the bank­rupt­cy case, Gri­fols al­so agreed to mile­stone pay­ments up to $3 mil­lion more up­on any reg­u­la­to­ry ap­provals.

But they will have quite a few hur­dles to over­come. Reg­u­la­to­ry agen­cies and out­side ex­perts alike made their skep­ti­cism to­ward Ar­a­digm’s da­ta clear. The FDA slapped down an ap­pli­ca­tion for Apul­miq and re­quest­ed a new Phase III tri­al back in 2017, and the com­pa­ny with­drew its sub­mis­sion in Eu­rope af­ter the EMA in­di­cat­ed it was go­ing to do the same.

Ar­a­digm’s idea had been to fight lung in­fec­tions with in­haled for­mu­la­tions of ciprofloxacin. Avail­able as pills, eye drops, ear drops and by IV, the an­tibi­ot­ic was al­ready de­ployed against a wide range of con­di­tions such as joint in­fec­tions, in­tra-ab­dom­i­nal in­fec­tions, in­fec­tious di­ar­rhea, res­pi­ra­to­ry tract in­fec­tions, skin in­fec­tions, ty­phoid fever and uri­nary tract in­fec­tions.

The Newark, CA-based com­pa­ny turned to an­tibi­otics af­ter an ef­fort, part­nered with No­vo Nordisk, to de­vel­op an in­hal­able form of in­sulin flailed.

Yet their Phase III stud­ies for Apul­miq in non-cys­tic fi­bro­sis bronchiec­ta­sis yield­ed mixed da­ta, as the drug on­ly hit the pri­ma­ry end­point — length­en­ing the me­di­an time to first pul­monary ex­ac­er­ba­tion — in one tri­al but not the oth­er.

Gri­fols did not elab­o­rate on what it now plans to do with the as­sets. It would like­ly in­volve a two-year tri­al that the FDA asked for but Ar­a­digm didn’t have the mon­ey to fund.

“Ex­clud­ed from the sale are all of the Com­pa­ny’s cash and cash equiv­a­lents, ac­counts or notes re­ceiv­able, cer­tain con­tracts, tan­gi­ble per­son­al prop­er­ty, the name Ar­a­digm Cor­po­ra­tion, ac­counts and records of Ar­a­digm Cor­po­ra­tion, all ben­e­fit plans and the shares of Ar­a­digm,” a state­ment not­ed.

Ar­a­digm was one of three an­tibi­otics play­ers to de­clare bank­rupt­cy last year. In a mar­ket where even com­pa­nies that come up with suc­cess­ful prod­ucts can’t sur­vive the com­mer­cial crunch, in­vestors seem to have even less pa­tience for the failed ones.

The average level of investment required for a biotech start-up to succeed is increasing every year, elevating the pressure even further on venture capital to make smart financial investments. Financial investment alone, however, does not always guarantee that exciting innovations can be transformed into real businesses that make a meaningful difference to patients.

Beyond just capital

At Astellas Venture Management (AVM) – a wholly-owned venture capital organization within Astellas, headquartered in the San Francisco Bay Area – capital is just one of the ingredients we offer to add value to our biotechnology investments and partnerships. We generally take a strategic investor approach for companies in our invested portfolio, providing access to expertise, technology and/or resources in addition to the injection of finance. An equity investment from AVM can include access to Astellas’ research and development (R&D) capabilities and expertise, and a global network of partner academic institutions and biotechnology companies, to help advance and accelerate the start-up’s innovation.

Unum $UMRX is working its way through a survival plan of sorts.

After getting hit with a trio of FDA holds in its brief public history and triggering its second pivot to a new lead drug program while laying off 60% of the staff, the troubled penny stock biotech Unum Therapeutics has hatched new plans to secure financial backing while lining up a go-forward strategy for the company.

First, Lincoln Park Capital Fund has agreed to buy up to $25 million of the long-suffering stock, as Unum directs. And the executive team — led by CEO Chuck Wilson — has put everything on the table for consideration: a sale, acquisition, merger, licensing deal, you name it. The ACTR707 program, meanwhile, is being formally wrapped up — their second failed lead program.