Having failed to obtain additional financing or consummate a strategic transaction, drug developer Epix Pharmaceuticals said it is shutting down the company and has terminated nearly all of its employees.
Epix of Lexington, MA, is planning to auction off its assets, including intellectual property, regulatory dossier, fixed assets, and clinical inventory, and distribute the proceeds to its creditors, according to Joseph Finn, founding partner of the Finn, Warnke, and Gayton law firm in Wellesley Hills, MA. The firm has been retained to oversee the liquidation.
Epix was forced to shut down after being unable to find additional financing or consummate a strategic deal with another firm. The company had been struggling since last year, reducing its workforce in October 2008 and again in March 2009. The firm in May reported that it was seeking "strategic alternatives" and might be forced to file for bankruptcy by August if it was unable to restructure.
FDA troubles
Epix's lead product for the imaging market was MS-325, a contrast agent designed for evaluating aortoiliac occlusive disease in adults with known or suspected peripheral vascular disease. Epix said the agent was the first contrast product specifically designed for MR angiography.
Epix originally licensed rights to MS-325 to German drug firm Schering (now Bayer HealthCare Pharmaceuticals), which marketed the product as Vasovist. The companies won approvals to sell the agent in Europe and in a number of other regions, but Epix's efforts in the U.S. hit a snag in 2005, when the U.S. Food and Drug Administration (FDA) declined to approve MS-325's initial regulatory application, instead asking for additional clinical trials of the product.
Epix negotiated with the FDA for the next three years, even filing formal appeals with the agency to win approval. Ultimately, the FDA agreed to accept a resubmission of MS-325's new drug application if the company conducted a reread of images from the original clinical trial. The FDA finally approved the product in December 2008.
By then, Epix and Schering had terminated their marketing partnership for MS-325, with rights to the agent reverting to Epix. The company was also entering into a cycle of workforce reductions, and in March 2009 announced that it had received a "going concern" notice from its auditors regarding its ability to continue operations.
In an effort to raise funds, Epix in April 2009 sold U.S., Canadian, and Australian marketing rights to MS-325 for $28 million to Lantheus Medical Imaging of North Billerica, MA. Lantheus said it planned to relaunch the agent under a different name by the end of the year.
With the divestiture of MS-325, Epix was no longer active in the imaging market and instead focused on two therapeutic compounds, one for treating Alzheimer's disease and another for treating pulmonary hypertension associated with chronic obstructive pulmonary disease.
As it winds down its operations, Epix expects to retain Elkan Gamzu, Ph.D., its president and CEO, for a short period of time to assist in implementing an orderly dissolution. The company said it did not expect to be able to distribute proceeds from the auction to shareholders once its creditors had been paid off.
"It is with great disappointment that the company must proceed with this decision. Over the past several months, we had taken several actions in an effort to improve the financial health of Epix," Gamzu said. "Despite this and the efforts of our financial advisors who approached numerous third parties over the past several months, we were unable to obtain additional funding to continue our operations or consummate a strategic transaction."
By Brian Casey
AuntMinnie.com staff writer
July 23, 2009
Related Reading
Epix to buy shareholders' stock, June 4, 2009
Nasdaq delists Epix stock, May 14, 2009
Epix to pursue strategic alternatives, May 12, 2009
Epix to complete tender offer, May 5, 2009
Epix works to avoid bankruptcy, April 9, 2009
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