Last rites for Sienna, as struggling biotech files for Chapter 11
More than three years after making a $65 million dollar public debut, Sienna Biopharmaceuticals has filed for bankruptcy.
The company’s shares $SNNA — which once crossed the $24 mark — have recently been languishing in penny stock territory — the stock never quite recovered from the colossal failure of its experimental skin drug, SNA-001, in acne patients in 2017 (although the therapy is still being evaluated as an approach for laser hair removal).
This January, the company executed a restructuring plan to focus its resources on its lead product candidate, SNA-120, for psoriasis and the associated pruritus — culling 20 jobs in the process. By August, the company had disclosed it had hired Cowen to explore financial and strategic alternatives — and would initiate its planned late-stage studies evaluating SNA-120 until it had secured enough capital.
As of June 30, Sienna had cash and cash equivalents of $49.2 million and restricted cash of $0.2 million — in bank deposits and cash invested in US Treasury money market funds.
But it also has a loan agreement with Silicon Valley Bank (SVB). In a filing on Tuesday, Sienna said it had paid $21.3 million in anticipation of the Chapter 11 filing — the balance left to pay is $10 million.
In connection with the bankruptcy filing, the company also cut 7 more jobs — which will cost it $1.3 million and be accounted for in the third quarter of 2019. The company’s stock sank nearly 59% to 28 cents in early Tuesday trading.
Apart from SNA-120, the company also has SNA-125 — being tested for use in atopic dermatitis and psoriasis. Both drugs came from Sienna’s acquisition of Creabilis.