Tapestry Pharma Comes Undone

Tapestry Pharmaceuticals (NASDAQ: TPPH) is plummeting today down some 80% at the market open, a recent 8K filing with the SEC details the unfortunate preparation for bankruptcy filing due to an inability to finance continuing operations. A sad day and a black eye for the Colorado life science ecosystem indeed.


Following are some of the most recent details submitted to the Securities and Exchange Commission:

On February 10, 2008, our Board of Directors authorized a reduction in our operations. On February 11, 2008, we eliminated 22 positions (65% of our work force). The only positions for employees to be retained consist of our Chief Executive Officer (Leonard Shaykin), Chief Operating Officer (Martin Batt); Senior Vice President and Chief Financial Officer (Gordon Link); Chief Medical Officer; Vice President, Product Development; and seven other positions, three of which will be working part time. We also expect to terminate our existing facility leases.

We have ongoing clinical trials that will be continued to the extent practicable in order to retain the value of our clinical trial data and intellectual property. The amount required to continue these trials will be dependent upon the time required to secure financing or sell our assets if we are able to do either. We also anticipate that certain costs will be incurred to support and protect our intellectual property.

Over the past year, we have pursued without success a variety of possible transactions to finance our operations through the sale of securities or to establish a strategic alliance, or, in the absence of such financing, to sell the Company, all with a goal to continue development of TPI 287, which we continue to believe has promise as an effective and safe cancer therapy, and to maximize the value of stockholders’ investment in the Company. As of February 8, 2008, we had approximately $100,000 of cash and cash equivalents and had accounts payable and accrued liabilities (including unpaid severance costs and unpaid accrued vacation but excluding lease termination costs) of approximately $6.5 million. No severance benefits are being paid currently to any employees. The Company has taken the following steps:

• Retained bankruptcy counsel and initiated steps to file for bankruptcy protection under Chapter 11 of the Bankruptcy Code.
• Reduced it workforce from 34 to 12 persons.
• Attempted to sell its investment in ChromaDex, Inc., a privately held supplier of phytochemical reference standards for the nutraceutical, dietary supplement and functional food industries of which we are a shareholder.
• Taken other steps to reduce expenses, including closing down facilities that are no longer needed based upon our reduced level of operations.
• Determined that no additional sites for clinical trials for TPI 287 will be initiated and that patients who are not yet screened will not be put on study.
• Determined to continue efforts to sell or finance the Company or to sell or license our intellectual property.

We believe that the Company has very few options now other than filing for bankruptcy and attempting to reorganize or to sell our assets in a bankruptcy proceeding. In such a circumstance, holders of our common stock may receive nothing for their shares.

***NOTE*** Read the new eBook CLSDF 2007 - What's In A Year? (HERE)!

If you enjoyed this post get free email or RSS updates (here).

Colorado Public Company News:

By my calculations there are ten publicly traded CO-based life science companies. I will begin a regular update of this group. Another group of public companies are operating in or have other significant interests or relationships with entities in Colorado. This group includes Amgen (NASDAQ: AMGN), Gilead (NASDAQ: GILD), Merck (NYSE: MRK), Roche (VTX: ROG.VX) and Agilent (NYSE: A). I plan to do equivalent updates of this Colorado-Related Public Company group. Naturally if I am overlooking any companies that should be included in either category please bring them to my attention (via email).

Accelr8 (AMEX: AXK) ’06 REVENUE: ~ $213K APPROVED PRODUCT(S): None FOCUS: deliver bacterial identification and specific antibiotic susceptibility testing within 8 hours of specimen receipt. PIPELINE: development stage for the BACcel™-1.0 and the BACcelr8r™, based on its innovative surface coatings, assay processing, and detection technologies. Accelr8 also licenses certain of its proprietary technology for use in applications outside of its own products. NEWS: Announced accumulation of large data sets from prototype instruments and validating assays, next focus to ramp engineering to develop marketable product, Presented MRSA data at ASM meeting

Allos Therapeutics (NASDAQ: ALTH) '06 REVENUE: ~ ($32MM) APPROVED PRODUCT(S): None FOCUS: on the development of small molecule therapeutics for cancer PIPELINE: Pralatrexate (PDX) lead 2 Phase II for peripheral T-cell lymphoma and non-hodgkin’s lymphoma 3 Phase I for non-hodkin’s lymphoma (PDX plus gemcitabine), non-small cell lung cancer and T-cell lymphoma (PDX plu folic acid) NEWS: Presented at Bear Sterns conference yesterday, replay is (here), initiated enrollment for Phase I PDX plus folic acid study added to the Russel1 3000 broad market index.

Array BioPharma (NASDAQ: ARRY) – ’06 REVENUE: ~ $45MM APPROVED PRODUCT(S): None FOCUS: Cancer and inflammatory disease small molecule drugs. PIPELINE: 1 Phase II candidate ARRY886 MEK target, 6 Phase I candidates ErbB-2/EGFR, p38, KSP, MEK targets, 3 Pre-clinical candidates. NEWS: CEO Rob Conway presented at the TWP Healthcare conference last week. The webcast has not been posted yet, expect to find it (here), ARRY380 advances to Phase I trial

Aspen BioPharma (NASDAQ: APPY) ’06 REVENUE: ~ $1.2MM APPROVED PRODUCT(S): Manufactures and markets approximately 30 purified protein products primarily for use as controls by diagnostic test kit manufacturers and research facilities, to determine whether diagnostic test kits are functioning properly. FOCUS: Development of novel animal reproduction products for large worldwide markets. PIPELINE: Developing diagnostic products, such as AppyScore ELISA test and AppyScreen, for. It also provides three bovine reproduction products, SurBred, a blood test designed to determine pregnancy status in dairy cattle; StayBred, a luteinizing hormone analog for inducing ovulation in cows; and BoviPure FSH, a follicle stimulating hormone analog for ovulation and embryo transfer in dairy and beef cows. The company is developing two equine reproduction products, EquiPure LH, a luteinizing hormone analog for inducing ovulation in estrous mares; and EquiPure FSH, a follicle stimulating hormone analog for ovulation and embryo transfer in horses. NEWS: Presented at Roth Capital Partners conference, webcast available (here). Shares recently moved from trading on the OTC bulletin board under APNB.OB to the NASDAQ capital mrkts xchange under APPY.

Ceragenix Pharma (OTCBB: CGXP.OB) ’06 REVENUE: ~ ($4.7MM) APPROVED PRODUCT(S): EpiCeram® for treatment of atopic dermatitis (eczema) FOCUS: a biopharmaceutical company engaged in the discovery, development, and commercialization of a portfolio of small molecule cationic steroid antibiotic products in the fields of infectious disease and dermatology PIPELINE: preclinical candidates for neonatal barrier repair, cvc infections and burn dressing. Products are all based upon skin barrier repair and the ceragenin technologies NEWS: Recent recipient of the Frost & Sullivan's 2007 North American Technology Innovation Award for the field of Anti-Infective Coatings. Have not been able to consummate licensing deal for EpiCeram® by the forecasted dates previously released, commercialization is targeted for 2008. In vitro data indicate that CSA-13 may be effective to treat multi-drug resistant Pseudomonas aeuroginosa.

Encision (AMEX: ECI) ’06 REVENUE: ~ $11MM APPROVED PRODUCT(S): Sells a range of articulating instruments, such as scissors, graspers, and dissectors; fixed-tip electrodes; and suction-irrigation electrodes. In addition, Encision markets the Active Electrode Monitoring System monitor product line that is used in conjunction with the AEM Instruments. FOCUS: A medical device company offering a line of AEM Surgical Instruments, which prevents stray electrosurgical burns from insulation failure and capacitive coupling. PIPELINE: ? NEWS: Received warning letter from AMEX that ECI did not satisfy rule for continued listing. Reported a 3% decrease in quarter-over-quarter in net sales, ordering patterns of reorders for re-usable equipment was cited as a cause for the decrease. Will begin to manufacture its own disposable scissor inserts.

Heska (NASDAQ: HSKA) ’06 REVENUE: ~ $75MM APPROVED PRODUCT(S): Vet ABC-Diff Hematology System, ALLERCEPT® Allergy Testing and Treatment, CBC-Diff™ Veterinary System, E.R.D.-HealthScreen® Urine Tests, F.A. Granules, HemaTrue™ Veterinary System, i-STAT® Clinical Analyzers, Solo Step® Heartworm Tests, SPOTCHEM™ EZ Chemistry System, ThyroMed™ Chewable Tablets and Feline UltraNasal® Vaccines FOCUS: The company operates in two segments, Core Companion Animal Health, and Other Vaccines Pharmaceuticals and Products. The Core Companion Animal Health segment includes diagnostic and other instruments and supplies, as well as single use diagnostic and other tests, vaccines, and pharmaceuticals primarily for canine and feline use. PIPELINE: TBD NEWS: 3Q07 earnings call set for 7 November, call in info (here)

Pharmion (NASDAQ: PHRM) – ’06 REVENUE: ~ $239MM APPROVED PRODUCT(S): Vidaza® for myelodysplastic syndromes, Thalidomide® for multiple myeloma, erythema nodsum leprosum, Innohep® for deep vein thrombosis Refludan® heparin-induced thrombocytopenia FOCUS: Hematology and oncology PIPELINE: 4 Phase III candidates MDS, 1st and 2nd line MM, hormone refractory prostate caner, 5 Phase II candidates acute myelogenous, small cell lung cancer hematological malignancies, 4 Phase I candidates NEWS: Presentation from yesterday’s Bear Stearns conference will be posted (here), oral Azacitidine was granted fast-track status for myelosdysplastic syndromes, granted US Orphan Drug status for MGCD0103 for the treatment of hodgkin’s lymphoma

Replidyne (NASDAQ: RDYN) ’06 REVENUE: ~ $16MM APPROVED PRODUCT(S): None FOCUS: focused on discovering, developing, in-licensing, and commercializing anti-infective products. PIPELINE: 3 Phase III for bronchitis, sinusitis/pneumonia and acute otitis media, 2 Phase I for skin infections (impetigo and MRSA) and wound infections NEWS: Keep your eyes peeled for announcement of a new development partner for Faropenem.

Tapestry Pharma (NASDAQCM: TPPH) ’06 REVENUE: ~($17MM) APPROVED PRODUCT(S): None FOCUS: oncology, third-generation taxane prostate for pancreas and glioblastoma mutliforme PIPELINE: 1 Phase II candidate TPI287 for hormone refractory prostate cancer NEWS: Recently reported 2Q07 financial results, recently withdrew S-1 filing for proposed $40MM common stock offering based upon encouraging data presented at ASCO and is pursuing other financing opportunities.

Tapestry - $25.5M In Private Placement

It has been a Thursday morning full of great news...

Boulder based Tapestry Pharmaceuticals, Inc. (Nasdaq: TPPH ) announced today that it has closed on the sale of 12.75 million shares of its common stock at a price of $2.00 per share, for gross proceeds of $25.5 million, with nine institutional investors. Warrants for an additional 12.75 million shares were also issued with a strike price of $2.40 per share. The private placement was led by Special Situations Funds, Tang Capital Partners, LP, and Baker Brothers Investments and includes Biotechnology Value Fund, L.P., Fort Mason Partners, L.P., Heights Capital Management, Merlin BioMed Long Term Appreciation, LP, Versant Capital Management LLC, and Xmark Funds.

"The closing of this financing gives Tapestry the resources necessary to aggressively advance our lead oncology compound, TPI 287, into multiple Phase II clinical studies as well as to continue the development of an oral formulation of this drug candidate," commented Leonard Shaykin, Chairman and CEO of Tapestry Pharmaceuticals.

TPI 287, a proprietary third generation taxane, is Tapestry's lead clinical compound. This compound was designed to overcome multi-drug resistance in solid tumors that have become resistant to taxane therapy. TPI 287 is currently in two Phase I studies in the United States and overseas to determine the safety and pharmacokinetic profile of the compound. A number of Phase II studies are planned in several of the major tumor types and are projected to begin in this calendar year.Both in vitro and in vivo studies suggest that TPI 287 may be orally bioavailable. An oral form of the compound is currently in preclinical development.