Drug developer Tranzyme board to investigate sale, merger
Tranzyme Inc.’s board is looking into the possible sale, merger or other business combination for the company, which has discontinued development of both of the two drug candidates that it had in clinical trials.
The company’s announcement Friday comes after the company has stopped development of its lead product candidate, ulimorelin, and also has discontinued testing of the candidate it had subsequently planned to focus on, TZP-102.
While the company has no other drug candidates that have made it to clinical trials, it does have preclinical research programs, according to filings with the U.S. Securities and Exchange Commission.
The company announced in May of last year that it was discontinuing development of ulimorelin after data from two Phase III trials showed no statistical difference between ulimorelin and placebo groups. The company was developing the drug to speed gastro-intestinal recovery in patients after surgery.
Later, Tranzyme said it was discontinuing patient enrollment in a trial testing its TZP-102 in diabetic patients for management of a stomach condition. The results of an analysis of a second Phase 2b trial were consistent with an earlier test that showed a large placebo effect, and no treatment effect.
The company’s stop price was down 76 percent compared with the preview close to below $1 on Nov. 15, which was the day it announced that results of an analysis of the results of the first TZP-102 Phase 2b trial.
The company is in danger of being delisted from the Nasdaq Stock Market if it doesn’t get its stock price above $1 for at least 10 consecutive days before July 1, according to U.S. Securities and Exchange Commission filing.
Tranzyme got a notification from Nasdaq officials in January that said the company was out of compliance with a minimum bid price rule since its common stock value closed below $1 per share for 30 consecutive business days .
If the company doesn’t come back into compliance by July 1, Tranzyme’s stock will be delisted. The company can appeal that determination. Alternatively, the company may be eligible for an additional grace period.
Thursday, Tranzyme’s stock price closed at about 56 cents. Its stock was trading up about 10.6 percent to 61 cents Friday afternoon.
Friday’s announcement said the company’s board is looking into a sale or merger or other transaction to “maximize value to its shareholders,” but has not made any decision to pursue any specific transaction. The release said there’s no set timetable for its strategic review.
The company has retained Stifel Financial Corp. as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP as its legal counsel.