With lawsuits looming and the company still reeling from Proellex safety problems, Repros Therapeutics Inc. has continued to slide, saying Monday that it was headed toward bankruptcy unless it gets some additional cash immediately.
Shares in the company fell 29 percent Monday on news of its bankruptcy concerns.
The Woodlands, Texas-based company already was running low on cash when earlier this month it voluntarily stopped dosing in Proellex trials due to elevated liver enzymes in study patients. The product was being tested as a potential treatment for chronic symptomatic uterine fibroids, anemia associated with the condition and endometriosis.
Repros initially saw increased liver enzymes at the higher dose of 50 mg, but recently observed the same problem at the lower 25-mg dose, causing shares in the company to plummet 48 percent. (See BioWorld Today, Aug. 4, 2009.)
As a result, the FDA placed Proellex on clinical hold for safety reasons and called for weekly updates on the patients who experienced a serious adverse event and still have elevated liver enzymes.
Angry shareholders have filed a class-action lawsuit against Repros, claiming that the company issued false and misleading information regarding the results of clinical trials for Proellex. Repros has retained counsel to assist in its defense against the complaint.
The company also is facing delisting from the Nasdaq Global Market unless it can meet the minimum market value requirement of $50 million by Nov. 5.
Repros' other product, Androxal, was being tested as a candidate for male infertility and restoring testicular function in men with diabetes. The company has not yet reported results from its comparative Phase IIb study (ZA-201) of Androxal vs. Testim 1 percent testosterone gel (Auxilium Pharmaceuticals, Malvern, Pa.).
The FDA has indicated that testosterone can't be used as an endpoint, and urged the company to submit a protocol for Androxal in diabetes, a large study that could be difficult for the small biotech to fund.
The chances of the company quickly finding a buyer or a partner are slim, Kimberly Lee, an analyst with Wedbush PacGrow Life Sciences, told BioWorld Today. "It is likely they will need to file for bankruptcy," she said.
Lee noted that for years Joseph Podolski, who is now CEO, had sought to sell the company and that it also considered partnering, but to no avail. Her firm has issued a sell rating for Repros.
In an update filed Monday with the Securities and Exchange Commission, Repros said that as of Aug. 14 it had about $2.7 million in cash and cash equivalents, compared to accounts payable and accrued expenses higher than $7.5 million. At the end of June, Repros had about $4 million in cash and cash equivalents and its accounts payable and accrued expenses were about $7.5 million.
The company acknowledged that it lacks the funds to support ongoing trials of Androxal, to complete all necessary activities relating to the halted Proellex program, pay accounts payable and accrued expenses as well as its normal corporate overhead and expenses.
As a result, Repros said that effective Aug. 16, it adopted a 50 percent salary reduction program for all salaried employees in an effort to reduce expenses.
Although the company said it is in the process of exploring potential new financing alternatives, it said there are no guarantees. "We may need to seek protection under the provisions of the U.S. Bankruptcy Code," it said in a 10-Q filing Monday.
Net loss for the three-month period ended June 30 was $8.9 million or 59 cents per share as compared to a net loss of $6.1 million or 48 cents per share for the same period in 2008. Interest income decreased 99 percent to $1,000 for the three-month period ended June 30, compared to $91,000 for the same period in 2008
Shares in Repros (NASDAQ:RPRX) lost 33 cents, closing at 82 cents.