In May of last year, biotech company PhaseRX broke an unprecedented IPO drought in Seattle with its $18.5 million initial public offering. But just 19 months later, the company has filed for bankruptcy and is looking to sell, according to court documents.
PhaseRX develops treatments for children with rare, life-threatening liver defects. Just a year ago, the FDA gave its first drug candidate Orphan Drug Status, basically a ticket for the fast lane through FDA approval.
At the time, trials for the drug were set to begin in 2018 and PhaseRX had a market value of $61 million.
Since then, the company fell below the $2.5 million stockholder equity required by the Nasdaq stock exchange and was under threat of being booted from the public market.
When it filed for bankruptcy Monday, the company reported just $4.1 million in assets and $1.8 million in cash or cash equivalents. It has $5.6 million in debts, including owing $5.2 million to Hercules Capital.
In a press release, PhaseRX CEO Robert Overell said the filing lets the company “continue to explore strategic alternatives, including a potential merger transaction. During this time we expect to continue to operate normally, and are thankful to our dedicated employees whom we expect to remain focused on the advancement of our programs.”
After the bankruptcy filing, Nasdaq ruled that the company can continue to be publicly listed until Jan. 31, 2018, with the expectation that the company is sold before that date.
PhaseRX also filed documents required to pursue selling the company. It currently has seven full-time employees, according to court documents.
The Puget Sound Business Journal was first to report the news.
Read the bankruptcy filing here: