Bioasis Technologies and Celyad Oncology are still waiting for better days. In separate updates, the two biotechs revealed that their respective turnaround strategies remain works in progress—and constraints on cash are still defining what can and can’t be achieved.
The companies have taken different approaches to their problems. Bioasis took the traditional route for cash-curbed biotechs by starting to look for strategic alternatives. Celyad, in contrast, is trying to reinvent itself, pivoting away from clinical development in response to setbacks and focusing on research into its NKG2D, B7-H6 and shRNA platforms with a view to forming collaborations.
Both biotechs still have work to do—and little time to do it. Late on Thursday, Celyad revealed it ended last year with 12.4 million euros ($13.3 million) in cash and cash equivalents, a sum it expects to fund operations into the fourth quarter.
The biotech is aiming to raise more money in the first half of this year. Friday morning, Celyad named Georges Rawadi as the person to lead the turnaround plan. Rawadi will take over as CEO next month. The new leader spent four years at Celyad before leaving to become CEO of microbiome biotech Ysopia Bioscience in 2018.
Celyad used its quarterly update to discuss a noncash impairment related to uncertainty of its revenues. The company has already revealed a pivot away from clinical development toward R&D discovery combined with licensing or partnering off its existing portfolio. However, “to date, no effective sublicence contract nor collaboration contract has been entered into, and as a result there is uncertainty as to the timing and amount of associated short, medium and long term revenues,” the company said.
Bioasis outlined its own problems in a statement after the market closed Thursday. The biotech ended (PDF) last year with less than $1 million in the bank and warned investors it could only fund operations until February. Subsequently, a payment Bioasis expected to receive from Midatech failed to materialize because the company had its own money miseries.
Facing a cash crisis, Bioasis “continues to reduce its research activities and defer payments to its vendors and officers” while it seeks strategic alternatives to fund its operations. Lind Global Macro Fund allowed Bioasis to defer a payment in February and, if it grants the same flexibility this month, the biotech thinks it can fund operations into mid-May.
The problems at Bioasis and Celyad are indicative of the broader challenges facing the biotech sector, which continues to be cash constrained after several years in which the money flowed fairly freely.