Exicure has already cut its workforce to the bone, but now the nucleic acid therapy biotech is searching for some sort of transaction to save what’s left.
The company cut its staff by half in January 2022 and then again by 66% in September, as well as shelving all research activities including partnered programs and kicking off work to offload its preclinical programs at the same time. Exicure also closed a private placement of its shares that handed 50.4% of the company to CBI USA.
While the company still hopes to find a home for immuno-oncology asset cavrotolimod and a preclinical neuropathic pain program, the restructuring efforts are stepping up, according to a Monday afternoon year-end corporate update.
“While the foregoing efforts with respect to our historical assets are continuing, we do not expect they will generate significant value for stockholders, at least in the near term,” the company said in the release.
Exicure is now exploring a wider array of strategic alternatives, including a transaction with some sort of partner that may be interested in merging into an existing publicly-traded organization. The company is considering transactions in biotech and life sciences, but also industries related to its historical operations. The transaction could include a reverse mergers or share exchange, or acquisitions of other businesses or investments, according to the release.
Since CBI USA has affiliates with connections in Asia, that’s where Exicure expects the efforts to find a partner will be focused, although a U.S.-based transaction is not off the table.
To do all of that, Exicure expects to have to raise additional financing in the next few months. The company had $9.8 million in cash and cash equivalents as of the end of 2022, with $5.4 million raised in the private placement. The $4.6 million in net proceeds from that deal will be used for pursuing the strategic alternatives.
Altogether, Exicure expects this money to fund operations “into the beginning of the fourth quarter of 2023”—so long as the company limits spending.
“It is very difficult to project the company's current cash burn rate given the transitional status of the company as it explores strategic alternatives and this estimate may prove inaccurate and the company may expend its limited resources sooner,” the update said.
Exicure also warned that given the current cash position, there’s significant concern about the company’s ability to continue as a going concern within a year of the financial statement, which is dated December 31, 2022. The company had 13 total employees as of that date, according to a related SEC filing.
“As a result, substantial additional financing will be needed by the company within the next few months to pay its expenses, fund its ongoing exploration of strategic alternatives and pursue any alternatives that it identifies,” the release said.
Exicure's troubles began in fall 2021, when the board's internal review concluded that former neuroscience group leader Grant Corbett, Ph.D., misreported data on a preclinical program throughout much of the first nine months of 2021. The Friedreich's ataxia program was axed, leaving the company hanging on to a few Big Pharma collaborations and a new lead asset SCN9A. But AbbVie and Ipsen walked away at the end of 2022 and SCN9A flunked in vivo studies in nonhuman primates, leaving the company searching for a way forward.