Codiak files for Chapter 11 bankruptcy as most executives head for the exit
Codiak BioSciences has filed for Chapter 11 bankruptcy, spelling an end to the employment of most executives, including founder Doug Williams, as the biotech says it “expects to consummate a sale.”
The eight-year journey at Codiak is nearing an end with Williams; CFO Linda Bain; medical chief David Mauro; scientific head Sriram Sathyanarayanan; legal and compliance chief Yalonda Howze; and SVP of HR Nicole Barna all packing up their bags in the first few days of April. Chief technology officer Konstantin Konstantinov will stay.
The Cambridge, MA drug developer said it began a marketing process before filing for Chapter 11 to test the waters for potential bidders. “Several parties” are engaged in discussions with Codiak, with a sale of the entire company or “core assets” expected “as soon as reasonably practicable,” according to the Monday update, which comes six months after Phase II plans were ditched and employees let go.
Codiak formed in 2015 with an initial $80 million, and in the first year of the pandemic, the company landed on the Nasdaq. But the initially quick-soaring share price $CDAK came crashing down from a $32 peak to penny stock range last year. The bankruptcy news sent the stock down another 30% before Monday’s opening bell.
Flagship Pioneering and ARCH Venture Partners created the biotech on the idea of turning exosomes — small vesicles within cells that deliver how-to manuals to other parts of the body — into medicines. Taking them from normal cells and turning them into a safe and effective postal service was the goal, per the founding work out of MD Anderson, which was paired up with co-founder Eric Lander of Broad Institute and now Biden Administration fame.
“The Board and management team have thoroughly assessed all of our strategic options and believe that this structured process represents the best possible solution for Codiak, taking into account our financial needs and the stage of our clinical and research programs,” Williams, the CEO and president, said in a statement.
Leading the bankruptcy work will be chief restructuring officer Paul Huygens at the firm Province. Huygens has had a hand in some big name brands before, but mostly ones you’d find in a shopping mall, not the labs that make new medicines. The résumé includes Payless ShoeSource, Guitar Center, Pier 1, Circuit City, Aeropostale and others.
As of its last quarterly update in November 2022, Codiak had said it would present preliminary data on its Phase I study of exoASO-STAT6 in advanced hepatocellular carcinoma. The company had also inked a partnership with the Coalition for Epidemic Preparedness Innovations for a pan beta coronavirus program, which it expected would lead to a clinical candidate. At the end of September, Codiak had about $52 million.