Paradigm Biopharma (ASX:PAR) has made the sad move of calling in voluntary administrators on Wednesday after the latest data from an ongoing osteoarthritis trial didn’t pass muster, leading to a winding-up of the company.
Paradigm has been advancing its PAR_012 candidate of interest to treat osteoarthritis, which is extracted from a compound found in Beech trees; but the darker side of the ever-fickle world of biotech has reared its head and come for Paradigm on Wednesday.
That voluntary administrators have been called in ultimately means the company has no money left with which to pay operating costs and staff; ultimately, the company was riding on a successful outcome from the trial.
A wave of share price pain is not yet evident as the company also moved to extend a voluntary suspension on Wednesday restricting trades, but it’s not hard to predict what will happen when trading is eventually resumed.
The company will now undergo a restructuring process alongside Obsidian Global GP and FTI Consulting. HotCopper users were mostly uniform in disappointment, if not more adversarial frames of mind.
That may be because the company originally issued a suspension of trading on 23rd of September before announcing the data threshold fail; One other factor may be that the company has pointed to “missing data” but remained vague on what that actually means.
“It is intended that the Company will continue analysing the available study data and reviewing its clinical program during the restructuring process, subject to the Administrators’ assessment and available resources,” Paradigm wrote on Wednesday.
“This work is intended to improve understanding of the interim outcome, including the impact of missing data, and inform the assessment of future development and commercial options.”
Of course, for anybody who didn’t sell off before the suspension, the fate of their investments is now in limbo – so perhaps some frustration is justified.
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