Infinity lays off 78% of staff, 3 board members after MEI merger fails
26 Jul 2023
Executive ChangePhase 2IPO
Preview
Source: FierceBiotech
Infinity is considering whether to withdraw its appeal for Nasdaq not to delist the company.
With hopes of a merger with MEI Pharma now sunk for good, Infinity Pharmaceuticals is jettisoning three-quarters of its staff and three board members to stay afloat while it scans the horizon for another financial life raft.
The planned combination of MEI Pharma and Infinity had been in the works since February. Yet despite surviving the intervention of a surprise bidder at the last minute, MEI’s shareholders finally voted on the proposal on Sunday and scuppered the deal for good.
Infinity had made clear the stakes from the start, warning in March that the proposed combination with MEI could be the last chance to avoid bankruptcy as its lead clinical candidate eganelisib eats up remaining cash reserves.
In a post-market release Tuesday, Infinity said it continues to believe that eganelisib “offers a near-term value creation opportunity that would be attractive to potential third-party acquirers.” The biotech has already taken the PI3Kγ inhibitor up to the initiation of a planned global phase 2 trial in head and neck squamous cell carcinoma but needs another company to take the candidate over the line.
In order to keep going while Infinity seeks a “strategic transaction to maximize eganelisib’s potential,” the biotech is laying off 21 employees—equivalent to 78% of its current workforce. Following their colleagues out the door will be three of the company’s eight board members.
“The remaining five members of the board have agreed to serve without compensation for the remainder of their board service,” Infinity explained.
If that wasn’t enough of a sign of the dire financial straits the company is now in, Infinity is also considering whether to withdraw an appeal for Nasdaq not to delist the company from the exchange. The biotech’s share price sunk below $1—the minimum required to remain on the Nasdaq—in November 2022 and has never resurfaced.
Infinity ended 2022 with $38.3 million in cash and equivalents, a sizable drop on the $80.7 million in the bank at the start of the year. Back in March 2023, the company explained that failing to get the MEI deal over the line meant the cash runway would run out in the second half of this year as opposed to its previous timeline of 2024. “This shorter cash runway is a result of expenditures related to merger activities and the advancement of eganelisib,” the company said at the time.
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