Destiny Pharma’s search for a partner to take its nasal infection prevention med into phase 3 has come up short, leading the British biotech to go private to avoid liquidation.
Destiny was one of the few biotechs to choose to list in London in recent years, joining the AIM exchange via a £15.3 million ($19.8 million at the time) offering in 2017. The Brighton, U.K.-based company’s pitch was to use the money to fund the phase 2b trial of XF-73, a nasal drug designed to prevent post-surgery staphylococcal infections.
That trial read out in 2021, showing that XF-73 Nasal—a synthetic dicationic porphyrin drug called exeporfinium chloride—produced a more than 99% reduction in nasal bacterial load when compared to placebo, hitting the study’s primary endpoint.
But the biotech has struggled to find a partner to take the asset into phase 3 development. With money tight, Destiny has been advised that its best chance of getting an infusion of equity is to return to being a private company.
“While there can be no guarantee, the board believes that the only viable option now available to Destiny Pharma to create future shareholder value is the pursuit of capital as a private company,” Nigel Rudd, chair of Destiny’s board of directors, explained in a July 15 release.
“Without taking this route, we believe that liquidation of the company is the most likely alternative,” Rudd added.
Destiny entered 2024 with £6.4 million ($8.3 million) in cash and equivalents, and notified investors as far back as April that despite engaging with “a number of potential partners” and receiving “some strong and positive feedback” about XF-73 Nasal, the company had been unable to nail down a licensing partner.
One stumbling block for potential partners was the anticipated phase 3 trial costs, as well as the general view that antibiotics have limited commercial potential, Destiny explained at the time. To this end, the company pledged to work to “enhance the attractiveness” of XF-73 with a new trial design that should halve the clinical costs.
Despite the best efforts of CEO Chris Tovey, who moved across to Destiny from Jazz Pharmaceuticals in September 2023, to “vigorously pursue a potential licensing deal,” there is still no partner in sight.
“Although we continue to speak to partners about this renewed proposition, we are extremely disappointed that a deal has not been forthcoming and, given our shortening cash runway, have been forced to amend our strategy as we seek to continue to progress this important product,” Tovey said in this morning’s release.
Like many biotechs, Destiny has struggled on the public markets in recent years. The company’s stock rested comfortably above the one pound mark in 2021, but has declined since and despite a rally towards the end of 2023, now sits at just two pence per share. Destiny will put its delisting proposal to shareholders at a meeting later in July.