Running out of cash and kicked out of its HQ by the landlord, PixarBio hunkers down and slashes staff
A year ago PixarBio reverse merged its way onto the public markets, promising to raise tens of millions in cash as it led the way on development of a pain therapy that could replace morphine. The company confidently predicted an approval and market launch in 2018, boasting of technology that came out of the lab of MIT professor Bob Langer.
And it’s been downhill ever since.
In a mid-June SEC filing, the biotech says it was forced to give up its leased property in Massachusetts, including its headquarters in Medford, laid off more than half of its staff as it bled cash and grappled with an SEC fraud investigation, denying any wrongdoing. Its staff has been reduced from 27 to 10 in the first 6 months of this year.
In the meantime, its shares $PXRB — an OTC stock — are trading at around 29 cents.
PixarBio, helmed by CEO Frank Reynolds, says it got into a scrap with their landlord on the Medford lease after a late payment. So now, in place of that monthly $23,341 rent payment, they are paying $3,003 for a new, smaller office in Salem, NH.
Then there’s the SEC probe:
Pursuant to SEC subpoenas related to the investigation of the Company, several people have given testimony and we have produced substantial documents to the SEC. We have cooperated with the SEC. The Company and all of the directors and/or officers deny all allegations of wrongdoing. Although there can be no assurance that such investigation shall be resolved successfully, the Company is optimistic that the investigation shall be resolved successfully.
In the meantime, Reynolds and his family have been lending money to the company in exchange for promissory notes totaling more than $250,000. That’s substantially more than the company had in the bank when it filed its 8-K.
Our cash on hand on April 30, 2017 was $71,800. Our current average monthly cash burn rate is approximately $450,000.
Back in January Reynolds announced that the company had withdrawn its offer to buy InVivo Therapeutics — which he once ran — “for reasons related to management credibility and competence, corporate governance and IP control.” It linked to a 4-page letter outlining a list of grievances against InVivo, which had earlier sued him.
UPDATE 4:13pm — In response to this article, Reynolds sent this email to Endpoints News:
It appears that you were influenced by false statements in an erroneous article in yesterday’s Boston Business Journal by Max Stendahl. You have the same erroneous message that PixarBio left Massachusetts and we’re somehow heading “downhill”. My team in Cambridge was shocked to read it. We remain in Cambridge, MA and on target for FDA approval in 2019.
PixarBio remains in Cambridge, MA where we have labs, offices and a vivarium. I have been in Cambridge since the end of my formal education at MIT and Harvard in 2005-2006. We continue to raise cash from our very loyal investors.
I founded PixarBio in Salem NH in August 2013, because I’m disabled after being paralyzed in 1992. I need to work from home so we have our HQ at my home. As a disabled worker I never miss a day of work but it requires a wide range of adaptive technologies to keep me working 18-20 hour days, 7 days per week. The best place for me to optimize my work is in Salem NH so we moved back to where we founded the company.
We’re certainly not running anywhere. I invent and patent my own Neuro-technologies, then fund them myself.
The BBJ reporter Max Stendahl spoke with me and I confirmed with Max twice that PixarBio remains in Cambridge, MA yet Max ignored the truth, so he clearly has an agenda against PixarBio. Max wrote that I’ve been accused of Fraud and that is a false statement and Max was not wise to write such a bold false statement. As a CEO/CFO/CSO I’m a straight shooter in Pharma so I may ruffle feathers out-inventing all of my competitors but I always get the job done.
In July 2016 PixarBio announced our Ribbon cutting on our offices in Fort Lee NJ, so we can be close to our manufacturing partner. We announced Jan 2, 2017 that we outsourced manufacturing to the global manufacturing leader for drug delivery systems so we were cutting people and overhead. Closing of Medford should not surprise anyone as it was widely reported by me in the press. I invested over $10,000,000.00 of my own cash into PixarBio and although not in humans yet, we have over 40 pre-clinical studies where our pain treatment treats pain with every dose.
We have researched and developed a truly revolutionary pain treatment called NeuroRelease. We simply take a pill Carbamazepine that is FDA approved for PAIN, and we reformulate it for local depo injection to treat PAIN. As a 505(B)(2) we have less than one year clinical studies.
We have submitted a seminal paper to a peer review journals this week for publishing this fall 2017. Our researchers on the paper include our scientific advisory board members from Sloan-Kettering and NY Presbyterian- Cornell Weill.
PixarBio’s NeuroRelease remains the only non-opiate engaging that FDA that can replace opiates like morphine in hospitals and remove addiction from the clinic. This week our only competitor Pacira Pharmaceuticals reported flat sales quarter over quarter, and they have reported toxic problems with their drug Exparel.
We’ve enjoyed the engagement with the SEC. I have an excellent SEC compliance education and SEC compliance experience so we’ve all learned a lot about future SEC compliance to ensure we’ll avoid future reviews. We have never been accused of Fraud as Max stated, so we were shocked to read it but we’ll wrap up the SEC review and move forward toward FDA approval.
In regards to InVivo litigation, I’m 11-0 against InVivo Therapeutics in court since 2013, they will never escape justice. I invented the NeuroScaffold for spinal cord injury, it was not invented at MIT and I’ve filed over 140 patents covering my Neurological treatments such as the NeuroScaffold for spinal cord injury and NeuroRelease pain treatment drugs. I’ve invented in my own Cambridge, MA labs since 2005 not at MIT.