Zosano files for bankruptcy, looks to sell assets

June 7, 2022

Zosano Pharma, a California-based biotech focused on transdermal delivery, filed for Chapter 11 bankruptcy last week, with plans to sell its assets.

The clinical-stage company, which went public back in 2015, filed for bankruptcy in Delaware, listing assets and liabilities of at least $10 million each in court documents. 

The announcement doesn't come as surprise — Zosano had warned last month in its first quarter financial results that it was running low on cash and would "need substantial additional funding to fund its operations and will not be able to continue as a going concern if it is unable to raise additional funds."

Zosano has focused its development efforts is on M207 (branded Qtrypta), a proprietary formulation of zolmitriptan, delivered via the company's transdermal migraine patch. The headache med, currently available as a tablet and nasal spray, was first approved over 20 years ago, as AstraZeneca's Zomig.

Zosano initially filed for FDA approval of M207 in late 2019, but was handed a Complete Response Letter from the FDA in Oct. 2020, citing inconsistent zolmitriptan exposure levels observed across the clinical studies. The company, thinking it had corrected the problem, refiled the application in Jan. of this year, but the FDA disagreed, saying it didn't consider the resubmission to be a complete response to the previously identified deficiencies. The agency granted Zosano a one-year extension to April 2023 to resubmit the NDA, but short on capital and cash resources, Zosano suspended the M207 program.

The migraine patch uses Zosano's proprietary transdermal microneedle system, designed to facilitate rapid drug absorption into the bloodstream. The company says the delivery system offers rapid and consistent drug delivery, improved ease of use and room-temperature stability, and provides an alternative for therapies which require the use of a conventional needle for administration.

Zosano's assets on the auction block include the various patents for the microneedle patch system and product candidates. The company has developed its transdermal delivery system to administer molecules through the skin for the treatment of a variety of indications, including COVID-19 vaccines, an osteoporosis drug and cancer vaccines.