Safflower-based drug developer readies to wind down

A Calgary biotech firm that used genetically-modified safflowers as factories to develop a possible cardiovascular drug and a plant-based insulin has braced itself for the end of the road.

SemBioSys Genetics on Monday said a strategic partnership deal signed in October with Chinese pharmaceutical firm Tasly has sputtered as the companies "have been unable to agree on certain fundamental issues including initial budgets."

SemBioSys said its efforts to revive the deal with Tasly "have not been successful" and it thus hasn’t moved any of its intellectual property into the joint venture.

Thus, SemBioSys said Monday, it’s now likely that SemBioSys "will not continue to operate as a going concern" and it "has begun activities to orderly wind down the company’s business in the most effective manner possible."

The company announced April 4 that it would voluntarily delist its shares from the TSX effective at the close of trading May 1, at which time all of SemBioSys’ directors will resign from its board.

"The liquidity situation of the company has worsened since April 4… as no further proceeds have been raised," SemBioSys said in a release. Its "lack of funds and uncertainty to exist as a going concern will not allow it to list on another stock exchange."

The company said it "will continue to entertain strategic options should they arise," but even if one does, there "is no assurance that it will provide any return and value to its shareholders or stakeholders going forward."

SemBioSys, which laid off its staff in 2010, is working toward "the settlement of its obligations where appropriate" but offered "no assurance that this effort will extinguish any of, or the full amount of, the company’s liabilities."

"We all expected"

The company had hoped to connect with partners or backers to bring to market its safflower-based insulin or its product Apo AI (Milano) — a protein that’s found in HDL ("good" cholesterol) and that it hoped to develop into a treatment for athlerosclerosis.

The company’s technology, it was hoped, would provide "a cost-effective production solution for drugs needed in large quantities due to the number of people affected by disease and/or high dosage requirements."

Certain SemBioSys assets and intellectual property are secured by third parties and the licensor of its intellectual property has "certain rights" as well, the company said..

CEO James Szarko said Monday that the current situation is "very unfortunate and difficult… for all of the many stakeholders of SemBioSys that have provided so much commitment, energy and financial resources to what we all expected would be a successful venture, including the expectation that our novel science would have a fundamental impact on human health and the further well-being thereof."

The company has also put off its next annual general meeting, which had been scheduled for May 9.

Related story:
Safflower-based drug developer hits wall, Sept. 25, 2010

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