RIP: After burning through $463M, StemCells’ corpse is bought out for the public shell
Back at the end of May, Newark, CA-based StemCells $STEM joined the walking dead of biotech. Running out of cash, its Phase II spinal cord study failing badly, the executive team tossed in their cards and started to push away from the table.
Said CMO Stephen Huhn:
Unfortunately, the Company does not have the resources to implement changes in our development program to permit further investigation.
At the end of June, the company had a little more than $2 million in cash and an accumulated deficit of $463,732,581. Its last 50 staffers were cut loose.
Investors got the message fast. Its shares collapsed into the critical care arena of penny stock land, another cautionary stem cell tale in the colossal disappointment that billions of dollars in R&D investments has created.
Disappointed investors, though, were handed the kind of positive surprise this week that has eluded the regenerative medicine field. Looking for a spot in the public market, Israel’s Microbot Medical executed a reverse merger deal that sent shares flying north, spiking more than 600%.
MarketWatch reports that the remaining execs resigned the day of the merger. But the top staffers will at least get some severance in the deal. MarketWatch says that former CEO Ian Massey should land a $216,667 payment, with former chief financial officer Gregory Schiffman in line for a one-time payment of $187,500.
Investors, meanwhile, tempered their enthusiasm for the reverse merger, sending shares back down 27% on Wednesday morning.