Drug developer Celladon Corp said on Friday it may liquidate itself if it were unable to find a buyer, and was suspending development of its gene therapy for heart failure.

The company’s shares fell 38 percent to $1.36 in premarket trading.

Celladon said if it were to liquidate during the third quarter ending September, the net cash available for distribution to shareholders would be about $25 million-$30 million.

The company also announced a second reduction in its workforce on Friday. It said in late-April that it planned to reduce its workforce after its gene therapy, Mydicar, failed in a key mid-stage trial.

Celladon said in a filing in May that its board approved slashing its workforce of 34 full-time employees by about 50 percent.

The company earlier this month named Wedbush PacGrow Healthcare as its exclusive financial adviser and started a process to seek a merger or sale.

Gene therapies aim to insert corrective genes into malfunctioning cells.

Mydicar is a virus designed to deliver a gene that reconstitutes an enzyme responsible for heart muscle contraction.

Gene therapy, which promises a one-time cure for intractable and expensive-to-treat diseases, has been dogged by a series of disappointments and safety concerns in its more than 20 years of research.

However, investor interest in gene therapy has grown in the past 18 months, with Bluebird Bio, UniQure NV and Spark Therapeutics all staging successful Nasdaq debuts.

The development of better and safer viral delivery systems are also encouraging big companies including Pfizer, Sanofi SA, Bayer AG and Baxter International Inc to enter the space.



(Reporting by Amrutha Penumudi in Bengaluru; Editing by Sriraj Kalluvila)

Source: Reuters