Third Harmonic Bio has abandoned plans to take its chronic spontaneous urticaria (CSU) drug into phase 2, instead preparing to sell the asset while liquidating the business.
The writing was on the wall back in February, when Third Harmonic said it was halving its workforce and scrapping its other R&D work in order to take the drug, a KIT inhibitor called THB335, into a mid-stage study. At the time, the company said it had brought in TD Cowen to help the biotech “identify opportunities to maximize shareholder value through a strategic transaction and/or business combination.”
That verdict appears to have now been delivered—and it involves liquidating the company.
“Our management team and board of directors together have completed an efficient review of our strategic alternatives for maximizing the value of our assets and have determined that returning cash to shareholders and selling our assets, including THB335, is the best path forward,” Third Harmonic CEO Natalie Holles said in the April 14 release.
“We are proud of the work that our team has done over the past years to advance our science, to make tough decisions, and to act with integrity in the best interest of our patients and shareholders,” Holles added.
Third Harmonic will complete all phase 2 readiness activities for THB335 by mid-year with the aim of securing the best price from a potential buyer, the company said. Results from a phase 1 trial of various doses of the drug in healthy volunteers in February demonstrated dose-dependent reductions in serum tryptase, a biomarker of mast cell activation.
Assuming stockholders vote through a plan for the company’s dissolution at a June 5 meeting, Third Harmonic will delist from the Nasdaq and file a certificate of dissolution. Third Harmonic reckons that its existing capital resources, combined with proceeds from selling certain clinical assets, will be enough to pay off its remaining financial obligations.
Third Harmonic entered April with around $272 million on hand. The company expects to have between $246.6 million and $259.8 million available to pass back to its shareholders—excluding proceeds from a sale of THB335—which would equate to around $5.13 to $5.42 per share of common stock.