Shares of Kaleido Biosciences are plunging after the company announced its intentions to cease all company operations, lay off its remaining staff and delist from the Nasdaq Exchange.
Shares of Kaleido Biosciences, a microbiome-focused company backed by Flagship Biosciences, are plunging after the company announced its intentions to cease all company operations, lay off its remaining staff and delist from the Nasdaq Exchange.
In a filing with the U.S. Securities and Exchange Commission Friday morning, the Massachusetts-based company announced its board of directors voted to end all company operations, which includes the immediate termination of all employees that remained with the company following a January round of layoffs spurred by the cessation of a Phase II study in chronic obstructive pulmonary disorder.
Last year, the company was hit with a warning letter from the U.S. Food and Drug Administration regarding a program it was running with its COPD drug in COVID-19 studies. The FDA said the company failed to seek an Investigational New Drug Application for the study using its COPD drug, KB109. Kaleido argued that KB109 was a food rather than a drug and didn’t need to be authorized under an IND. The company said KB109 was being studied to assess its effect on the microbiome in a population of patients with mild to moderate COVID-19.
Kaleido was focused on a differentiated, small-molecule approach to treating inflammatory diseases. It was developing Microbiome Metabolic Therapies (MMT), which were designed to modulate the metabolic output and profile of the microbiome by driving the function and distribution of the gut’s existing microbes. In its filing, Kaleido Biosciences did not mention the fate of any of its existing pipeline of products. It is likely the board will seek a buyer for its remaining assets, which includes KB295, an MMT being developed to treat mild-to-moderate ulcerative colitis.
Following the layoffs and halting of the COPD study, Kaleido initiated a strategic process in an attempt to maximize shareholder value. However, the company noted in its filing that it was unable to identify any transactions or resources that could save the company. Without something tangible, the board opted to shutter its doors. Kaleido said it was assessing additional details regarding its plans to wind down the company and will provide additional information.
In addition to the termination of its employees, Kaleido noted that Daniel Menichella, president and CEO, tendered his resignation. Other executives followed, including William Duke, the company’s principal financial and accounting officer, and Johan van Hykckama Vlieg, the company’s chief scientific officer. There was no mention of the fate of Alison Long, the company’s chief medical officer who joined Kaleido in November of last year.
