Telios Pharmaceuticals Inc., which has been in a tailspin since lastOctober when its lead drug failed in clinical trials, filed for Chapter11 bankruptcy protection Thursday. The company also said itreceived an acquisition proposal.
Telios officials could not be reached for comment late Thursday. In aprepared statement, they said they "had received a letter proposingthe acquisition of the company on certain terms and conditions." Theletter's origin was not disclosed and details of the potential purchasewere not revealed.
Officials from the San Diego-based company also stated they"voluntarily commenced a Chapter 11 reorganization proceeding" torestructure Telios' debts, cut expenses, resolve shareholder mattersand focus on selling the company.
Telios had reported that it has $17 million in cash and a burn rate of$800,000 per month. Two weeks ago a federal judge told thecompany to set aside $13 million on behalf of preferred stockholderswho have filed a class-action lawsuit against the company. (SeeBioWorld Today, Jan. 16, 1995, p. 1.)
The suit's plaintiffs apparently were among those who participated ina public offering last fall in which Telios raised $14.25 million. Aweek after the stock sale the company reported failed results fromPhase III trials of Argidene gel for diabetic foot ulcers, sendingTelios' shares down 60 percent.
Telios initially considered buying back the stock from last fall'spublic offering, but officials withdrew the proposal after realizingthey couldn't afford it. They subsequently made drastic staff cuts andinitiated efforts to sell the company.
News of the filing was not released until after the market closed.Telios' stock (NASDAQ:TLIO) closed Thursday at 28 cents,unchanged. n
-- Charles Craig
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