Diffusion Pharmaceuticals is evaluating its options amid the prolonged bear market, including partnerships, licensing deals, divestiture for some of its tech or even selling off the whole biotech.
The company’s board has authorized a thorough review of potential strategic opportunities that could boost stockholder value and leverage the potential of its trans sodium crocetinate (TSC) therapies. There’s no timeline stamped on the review, which has been tacked onto prior efforts to identify acquisition and partnership transactions that could supplement or de-risk the company’s current development programs.
TSC, which is Diffusion’s lead—and only—asset is designed to improve the diffusion of oxygen to areas of the body with low oxygen levels, a condition known as hypoxia, which can arise as a complication of many hard-to-treat conditions. The biotech has several ongoing clinical trials assessing the asset in numerous indications, including pneumonia, anemia and solid tumors.
As of June 30, the Charlottesville, Va.-based company had $28.5 million in cash, cash equivalents and marketable securities on hand, according to second-quarter financial results. At the time the results were released, Diffusion said it expected its cash runway to stretch into the first quarter of 2024.
“We continue to believe TSC has potential benefits for patients, particularly as an adjuvant treatment to standard of care therapy for hypoxic solid tumors, like glioblastoma multiforme,” Robert Cobuzzi, Jr., Ph.D., Diffusion’s president and CEO, said in an Oct. 25 release. “We continue to seek opportunities to leverage our cash position and the significant skills and experience of our team to opportunistically identify novel product candidates that may deliver additional value for our stockholders.”
Cobuzzi has been leading the biotech for a little over two years, taking the reins from David Kalergis, who stepped down after more than 16 years with Diffusion. Kalergis, who has gone on to lead Atelerix Life Sciences as founding CEO, departed shortly after longtime colleague, chief scientific officer and co-founder John Gainer, Ph.D., exited the company in February 2020.
The strategic review comes at a time when many other biotechs are thinning out their pipelines and slashing staff numbers as the industry’s bear market stretches on, though analysts suggest a rebound may be on the horizon.