Tricida Inc., a clinical-stage pharmaceutical company working on a kidney disease drug, has filed for Chapter 11 bankruptcy protection in Delaware, with roughly US$350 million of debt, according to a court filing.
The San Francisco-based company will try to sell itself out of bankruptcy and has signed a restructuring support agreement (RSA) with 80% of its convertible noteholders, according to court papers.
The RSA includes milestones designed to facilitate an expedited sale process meant to maximize the value of the company's assets while preserving cash for the benefit of the company's estate and its creditors.
READ: Algernon Pharmaceuticals appoints cough study expert Dr Peter Dicpinigaitis as medical advisor
Failure to meet any of the case milestones would allow the consenting noteholders to terminate the RSA.
In October, shares in the company crashed 94.5% after it announced its VALOR-CKD renal outcomes clinical trial of Veverimer did not meet its primary endpoint.
The clinical trial was designed to evaluate Veverimer's ability to slow chronic kidney disease progression (CKD) in patients with metabolic acidosis and chronic kidney disease,
"In light of the disappointing results from the trial, and our cash runway, we are evaluating next steps” the group’s CEO and president Gerrit Klaerner said at the time.
Shares were a further 8.5% lower today at US$0.17.
Contact the author at jeremy@proactiveinvestors.com