Though its eponym in Greek mythology was able to successfully defeat the fire-breathing chimera, Bellerophon Therapeutics’ story is closing out on a much less victorious note.
The New Jersey-based maker of the InoPulse gas therapy delivery device is ceasing operations and eliminating essentially its entire workforce as it begins searching for “strategic alternatives,” according to a report (PDF) filed with the U.S. Securities and Exchange Commission on Thursday.
The reduction in force will affect “substantially all” of Bellerophon’s employees, including executive officers, according to the filing. The layoffs are expected to be complete by the end of the third quarter of this year and will add about $2 million in severance and other termination-related costs to the company’s second-quarter earnings sheet.
A trio of those executives—CEO Peter Fernandes, as well as Parag Shah and Martin Dekker, Bellerophon’s vice presidents of business operations and engineering and manufacturing, respectively—will be offered separation agreements, effective July 15.
The decision to wind down operations comes just a few weeks after Bellerophon reported disappointing results in a phase 3 trial of the InoPulse device to help treat fibrosing interstitial lung disease. Not only did the treatment not meet the primary endpoint, but it also demonstrated only a minimal, not-statistically-significant difference over the control group in terms of secondary endpoints.
Those results have now led Bellerophon to pull all participants from the phase 3 study, dubbed Rebuild, which had just wrapped up blinded treatment of all enrollees, according to a May announcement. The company has also gone several steps further, putting an end to all of its other ongoing InoPulse development programs, too.
With all R&D screeching to a halt and virtually all of its employees on their way out the door, Bellerophon is aiming to reduce operating expenses—and therefore retain at least some value for stockholders—as it looks into a potential asset sale, merger or even a full liquidation and dissolution of the company, according to the filing.
Bellerophon’s stock reacted to the news by dropping to its lowest-ever levels, reaching a nadir of 65 cents per share on Thursday afternoon. The stock had already faced a massive drop-off earlier this month, with the news of the failed clinical trial: It plummeted nearly 90% on June 5, opening that morning at 94 cents after a previous close of just over $7.
In a full-year earnings report shared ahead of the Rebuild results, Bellerophon tallied a net loss of $19.8 million and cash on hand of just under $7 million, widening the gap from the year before, when net loss was $17.8 million with almost $25 million in cash.
InoPulse is the sole asset in Bellerophon’s pipeline. The portable, battery-powered device delivers inhaled nitric oxide to patients throughout the day to help open up constricted blood vessels.
Bellerophon was studying the device’s use to treat pulmonary hypertension associated with interstitial lung disease—the subject of the now-nixed phase 3 study—as well as chronic obstructive pulmonary disease and sarcoidosis, indications that were both in phase 2 trials.