Cash-strapped biotech firm Codiak files for bankruptcy protection

Cash-strapped biotech firm Codiak files for bankruptcy protection

March 27 (Reuters) – Codiak BioSciences Inc (CDAK.O) said on Monday it has filed for U.S. bankruptcy protection in the latest blow to the struggling drug developer’s ambitions of making a COVID-19 vaccine.

The Chapter 11 bankruptcy filing ends months of investor uncertainty after the company, which has been facing a cash crunch, raised going concern doubts in its latest filing and cut its workforce by 37% last year.

Codiak previously said it would prioritize its COVID-19 vaccine development program that was funded by a global vaccine coalition, while halting development of two cancer drug candidates which were ready for mid-stage study.

The funding by the Coalition for Epidemic Preparedness Innovations in July was aimed at an experimental vaccine that would target COVID-19 as well as other coronaviruses.

Pre-clinical data from the company’s vaccine last year showed it produced a durable immune response against multiple SARS-CoV-2 variants.

Cambridge, Massachusetts-based Codiak said on Monday its executive management team will leave the firm effective April 7.

Challenging macro conditions and a dearth of large acquisitions has led to investors favoring companies that are testing their therapies or vaccines in humans, versus earlier-stage biotech companies, analysts have said.

Several smaller companies in the sector have been forced to cut jobs or restructure to save cash.

Codiak’s shares fell 45% to 22 cents in premarket trading on Monday.

Reporting by Bhanvi Satija and Sriparna Roy in Bengaluru; Editing by Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.

Source: Reuters