Biotech’s bear market has claimed another victim. 4D Pharma has gone into administration after failing to secure a loan to help ride out the “difficult” market conditions.
The British company, which is developing a novel class of drugs derived from the microbiome, explained that it had alerted previous creditor Oxford Finance LLC that 4D had been “exploring opportunities to secure additional funding for the company” in recent months.
“This has proved challenging but significant progress had been made, despite the very difficult prevailing market conditions,” 4D said in an announcement.
The two companies discussed a “potential funding alternative” on Thursday evening, but the following morning Oxford Finance called in its outstanding loans with the biotech, which total $13.9 million.
With no way to pay back the loan, 4D’s board requested that trading of its shares on London’s AIM stock exchange be suspended on Friday. Oxford Finance then instructed that the biotech be placed into administration.
The company noted that its wholly owned subsidiaries—namely 4D Pharma Research Limited, 4D Pharma Cork Limited, 4D Pharma León S.L.U. and 4D Pharma Delaware Incorporated—have not been placed into administration.
4D intends to work with the joint administrators on proposals to rescue the biotech as a going concern, “albeit there can be no guarantee that this will be successful.”
The company is focused on a class of novel oral drugs called live biotherapeutic products, which deliver single strains of bacteria that are naturally found in the healthy human gut. Most of 4D's ongoing clinical programs revolve around MRx0518, which is undergoing a number of phase 1 and 2 studies in combination with approved cancer drugs, as well as Rx-4DP0004 in asthma and Blautix in irritable bowel syndrome.
Fierce Biotech has contacted 4D to ask how its employees will be affected by the latest developments. It is only the latest biotech to struggle to stay afloat in tough market conditions. Fierce Biotech has reported on over 50 companies who have made cuts to their workforce so far in 2022.
To read about layoffs across the biotech industry, check out our Layoff Tracker.