ARYx shuts up shop as it waits out SPA response from FDA
This article was originally published in Scrip
ARYx Therapeutics has failed to secure critical financing to enable it to continue operations and has shut up shop, blaming the US FDA for its delay in responding to ARYx' September SPA submission for naronapride. "Due to this delay and the lack of clarity as to the path forward for the development of naronapride, ARYx could not obtain the financing it expected to close in November", said the US firm.
The serotonin type 4 (5HT4) agonist is in Phase II development for multiple gastrointestinal indications.
The FDA response to ARYx's SPA was due the first week in November. However, the FDA informed ARYx it would not provide its response until the first quarter of next year. ARYx says it believes the FDA response would be positive, but there is no certainty that it will be, or that financing can be secured even after that date.
"The substantial funding we sought would allow us to complete the first of two planned pivotal Phase III clinical trials for naronapride, at which time we would either seek a partner for the continued development of naronapride or look to raise additional funding to complete the development of the compound," added Dr Paul Goddard, chairman and CEO of ARYx.
Certain investors have indicated a willingness to potentially fund ARYx's minimal operations through the date of the anticipated FDA response and some creditors a willingness to defer principal payments on their debt for a period of time, "but no final agreements have been agreed to with these parties", said ARYx.
As a result, the company's board has agreed a restructuring plan which includes laying off all its employees in order to substantially reduce the company's operational expenses and, thereby, increasing the likelihood of ARYx attracting interim financing for the period of time needed to obtain the FDA response. All employees of ARYx, including officers, have had their positions terminated effective 15 December.
In August ARYx secured bridge financing of $6 million to fund operations until the end of the year (scripintelligence.com, 17 August 2010). Early in 2010, ARYx said that advanced discussions regarding the licensing of its oral anti-arrhythmic agent, budiodarone, had ended without a deal and it had become clear that ARYx would not complete a partnership on the product in the near term. As a result, ARYx would "explore the possibility of capturing full near-term value for its three lead programmes rather than pursuing licensing deals that provide value over an extended period of time". It was hoped the bridge financing would allow ARYx enough time to complete a transaction.