Cerulean Pharma (NASDAQ:CERU) is taking a hit in the stock exchange after it announced that it would be selling its anti-cancer goods and its stock purchase agreement with Daré Bioscience, a fairly new private company which will take control of Cerulean.
The acquisition, according to a statement, will result in a “NASDAQ-listed company with a focus on the development and commercialization of products for women’s reproductive health.”
Daré’s lead product is Ovaprene, a non-hormonal contraceptive ring in the clinical trial stage, which they claim currently has no rival. “Since the approval of the birth control pill by the FDA in 1960, most innovation has focused on hormones.” Daré is focused on expanding the treatment options in women’s reproductive health.
“We believe the Daré transaction, in conjunction with the asset sales, achieves this goal and provides Cerulean stockholders with an exciting opportunity in women’s health under an experienced leadership team,” said president and CEO of Cerulean, Christopher Guiffre.
The company will let go of 11 people from its workforce and will seek to pay off its debt with Hercules Capital (NYSE:HTGC) which according to Insider Financial is estimated to be around $12.5 million.
Sale of assets will pay for Cerulean’s debt
Cerulean’s stock finished last week at a price of $3.30 and even proved to be on our list of 5 Top Nasdaq Biotech Stocks. However, since the announcement, the company’s stock price went down, at the time of publication it trades at $1.08.
Last year Cerulean’s lead cancer treatment test CRLX101 failed a Phase 2 clinical trial, the company was then forced to let go of 23 full-time employees in order to reduce operating expenses. President and Chief Executive Officer of Cerulean Christopher Giuffre called it a difficult but necessary step.
Cerulean will sell CRLX101 and CRLX301, its two clinical candidates for treating cancer tumors, to BlueLink Pharmaceuticals, a subsidiary of NewLink Genetics (NASDAQ:NLNK) for $1.5 million. Also, Novartis (NYSE:NVS) is set to buy the rights to Cerulean’s dynamic tumor targeting platform for $6 million.
Cerulean will provide a public update on March 23, where it’s expected they will announce the future of their now shared research.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.