Despite two financial restructurings in the past year and a promising compound in the clinic, Genaera Corp. has simply run out of money, and its board of directors has decided to liquidate.

The dissolution of the company, which still needs stockholder approval, means that the company will be seeking buyers for its clinic products, all in diabetes and obesity.

Genaera's lead compound is Phase II candidate MSI-1436, its first-in-class, highly selective inhibitor of PTP1B for the treatment of Type II diabetes and obesity.

In February, the Plymouth Meeting, Pa.-based company reported that data from a Phase Ib trial in overweight and obese Type II diabetic subjects showed meaningful improvement in four primary outcomes used to evaluate Type II diabetes, including a 9.5 percent decrease in fasting blood glucose with a resulting 17 percent differential compared to placebo subjects.

Genaera also partnered in 2001 with MedImmune, now a unit of London-based AstraZeneca plc, for MEDI-528, an anti-IL-9 monoclonal antibody. It currently is in a Phase IIa trial in patients with stable asthma and exercise-induced bronchoconstriction.

The company's first restructuring came in May 2008 when it reduced executive pay by 10 percent, cut out bonuses and reduced headcount by 34 percent to help conserve cash. (See BioWorld Today, May 9, 2008.)

The company ended 2007 with about $21 million in cash, and that shrunk to about $8 million as of Dec. 31, 2008.

Then in March, Genaera announced an 80 percent staff reduction and announced its intention of monetizing its share of MEDI-528, a move than never happened.

Shares of Genaera (NASDAQ:GENR) dropped 8 cents, or 30 percent, to close at 18 cents Wednesday.