(Reuters) – Drug developer 9 Meters Biopharma and its units have filed for Chapter 11 bankruptcy protection, it said in a regulatory filing on Tuesday, sending its shares tumbling 70% in early trading.
Funding woes due to rising borrowing costs have crippled several drug developers as investors shun early-stage biotech companies for ones that are already testing therapies or vaccines in humans, analysts have said.
In recent months, early-stage drug developers Athenex Inc and Codiak Sciences have filed for bankruptcy protection.
9 Meters had reported cash and equivalent reserves of about $7 million as of March end. Its latest disclosure comes just months after it said it was preparing to test an obesity drug candidate, NM-136, in humans in the second half of the year.
NM-136 works by targeting an obesity-related hormone called gastric inhibitory peptide (GLP).
Its second drug candidate, vurolenatide, belongs to a class of drugs known as GLP-1 inhibitors, which work by triggering a feeling of fullness. The company was testing it as a potential treatment for short bowel syndrome.
Drugmakers such as Eli Lilly and Pfizer are also testing drugs targeting obesity-related hormones such as GIP and GLP-1 in a race for a share of the estimated $100 billion market for weight-loss drugs.
9 Meters said its interim chief Bethany Sensenig and other executives have also resigned. It expects its stock to be delisted from the Nasdaq Stock Exchange by July 26.
(Reporting by Bhanvi Satija in Bengaluru; Editing by Arun Koyyur)
