After San Francisco biotech company Third Harmonic Bio slashed its staff by half in February, it’s now taking a more drastic step. The inflammatory disease research company’s directors have decided to shut it down, liquidate its assets and distribute its remaining cash to stockholders.
Executives announced the shutdown in a Monday filing with the Securities and Exmodify Commission, writing that Third Harmonic’s board had unanimously approved a liquidation plan for a stockholder vote on June 5. The plan seems to stand a good chance; Third Harmonic’s stock jumped from around $3.50 a share to around $5.13, as of Wednesday morning, which is in the range of the estimated per-share payout if stockholders agree to shutter the company.
“If our stockholders do not approve the Plan of Dissolution, we would have to continue our business operations from a difficult position, in light of our announced intent to dissolve and liquidate,” the company wrote in another Monday filing. Along with the 50% layoff in February — after having 53 employees at 2024’s finish — Third Harmonic halted any work that isn’t related to its drug prospect for treating chronic spontaneous urticaria, or hives.
That drug prospect plus Third Harmonic’s $272 million in cash and cash equivalents build up the core of the company’s assets as the likely liquidation approaches. A Phase 1 clinical trial for the urticaria drug went smoothly, the company stated, and it’s working to set up a Phase 2 trial for later this year. Getting the prospect to “Phase 2 readiness” would build it a more appealing asset to acquireers, Third Harmonic wrote in a Monday news release. The company stated in a filing that if the liquidation goes through, it will file its certificate of dissolution in the third quarter of 2025.
Despite the proposed shareholder payout, and the ongoing drug prospect, this planned shutdown is a rough cap on a rough stretch for investors and employees. January saw Third Harmonic’s stock tank; February brought the layoff. On Wednesday, Third Harmonic’s market cap sat just over $230 million — a major falloff from its November 2022 peak of just below $1 billion.
Still, Natalie Holles, the company’s CEO, wrote in the Monday news release: “We are proud of the work that our team has done over the past years to advance our science, to build tough decisions, and to act with integrity in the best interest of our patients and shareholders.”
The company did not immediately respond to SFGATE’s request for comment.
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