La Jolla Pharmaceutical: Going, Going, But Not Quite Gone

Xconomy San Diego — 

Staying in business was a challenge for La Jolla Pharmaceutical. Going out of business may be harder still.

After its lead drug candidate bombed last year in a clinical trial, La Jolla Pharmaceutical had few options. It proposed liquidation, but too few of its investors voted, so the plan failed due to lack of a quorum.

Last December, the company’s board opted to merge with Adamis Pharmaceutical, a San Diego-based company working on drugs for viral diseases. But La Jolla hasn’t been able to muster enough shareholder votes to get that plan approved either.

Time is running out.

So far, just nine percent of La Jolla’s shares have been voted. Most of these shares favor the merger, but their support isn’t enough. A majority of La Jolla shares must vote for the results to be valid.

A special meeting is scheduled today at 3 p.m. If the merger is not approved, the company will be liquidated and shareholders will receive two to three cents a share, La Jolla said in a press release.

Last December, Bruce reported that La Jolla had cash of $2.5 million to $3 million. A company spokeswoman couldn’t be reached for comment.

As previously reported, the merger would give La Jolla shareholders anywhere from 5 percent to 30 percent of the combined company, to be called Adamis Pharmaceuticals. The deal was structured as a reverse merger.

The trouble started for La Jolla Pharmaceutical a year ago, when its lead drug candidate, abetimus sodium (Riquent), failed in a clinical trial of lupus of the kidneys. An independent board of safety monitors found the company had no chance of reaching its goals of effectively treating lupus nephritis, and La Jolla said it decided to halt the study. Then it discontinued work on the drug.