New Jersey-based biotech Humanigen revealed this week in an SEC filing that it's exploring all restructuring options, including filing for bankruptcy.
After three board members resigned from their positions last week, the company was forced to report its non-compliance with specific Nasdaq rules. According to Nasdaq Rule, a Nasdaq-listed company must have a majority of independent directors on its board, and the existence of an audit committee with at least three independent directors meeting the eligibility requirements.
In addition to the board upheaval, the company faced significant setbacks in its business dealings. Negotiations with a privately held biopharma company for a proposed business combination, which was previously disclosed in the company's quarterly report in May, fell through, leading to uncertainty about future strategic partnerships.
Trouble began last year, when Humanigen released phase 3 data on its COVID-19 treatment, Lenzilumab, indicating a 54% improvement in survival without ventilation. But the FDA couldn't determine if lenzilumab's benefits outweighed its risks, rejecting emergency authorization for the drug, even after Humanigen changed primary and secondary endpoints. As a result, the biotech's stock plummeted over 50% in after-hours trading, settling around $1.30.
According to the SEC filing, Humanigen anticipates that the bankruptcy or other insolvency proceeding could come as soon as the third quarter of 2023.