|Celladon Corp. Shares Slump 40% on Mydicar development|
|By Marilyn Mullen|
|Friday, 26 June 2015 17:19|
Celladon Corp. (NASDAQ:CLDN) plunged over 40% to $1.31 and made a record low of $1.24 earlier in the session after the company revealed its plans of suspending more research on developing its MYDICAR program as well as its other pre-clinical programs which include Stem Cell Factor gene therapy as well as SERCA2b small molecule programs.
Sometime back, the firm had confirmed engagement of Wedbush PacGrow Healthcare as the exclusive financial advisor as well as a strategic plan pursuant for which the firm instantly started a process for seeking sale or merger.
This process is currently going on and the firm is expecting to give further updates on progress of the strategic plan in upcoming quarter which may include sale of firm or some of the assets as well as distribution of remaining cash to the shareholders.
Paul Cleveland, president and chief executive officer of Celladon, opined that the board of directors has in unison chosen that either a sale or a merger in return of further development of rest of the assets is the best way for maximising shareholder value. He added that the firm is pursuing it and if it is able to identify such a deal which gives superior value to shareholders, then it would proceed with liquidation as well as distribution of net cash to shareholders.
The firm has estimated if it liquidates during quarter three of the year, the net cash that it would be able to distribute to shareholders would be to the tune of $25-$30 million. This assessment is done on current assumptions and the real amount may differ from the estimate.
The firm also came out with a second reduction in the workforce with over half of employees not previously notified of termination in quarter three. Cleveland added that employees have been great performance under difficult circumstances