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Laid off 40%, all found jobs
The IPO
The IPO raised $75 million, and then the stock got hammered. A company that started as a small cap became a very micro cap during the financial crisis.
A failed trial
In the fall of 2009, a clinical trial for a rare disease called Gaucher disease failed, run with a big pharma partner. The dose was wrong, and the drug probably wasn't even the right one. In one week Amicus had a failed study and a partner who left, and with no access to the capital markets, the end of 2009 and early 2010 meant laying off 40% of the company.
The layoffs
The CEO did it quickly, transparently, and fairly. The company opened up its contacts and everything it had, and offered a good severance. Within six months, everyone who had been laid off had found another job. The remaining team buckled down and came together, grounded in the purpose of what the company was doing.
How can a stock trade below its cash?
Investors can value a company at less than the cash it holds when they expect it to burn through that cash on programs that fail. Companies in that spot often cut staff to preserve what they have. The gap is called negative enterprise value, since enterprise value is market capitalization minus cash and debt. Many small biotech stocks traded this way during the 2008 and 2009 market crash.
How does a wrong dose sink a trial?
A dose that is too low may fail to engage the target, and one that is too high may cause toxicity that forces the trial to stop. Dose selection in earlier trials sets the dose in later ones, so an error there can carry through. A 2022 review in Acta Pharmaceutica Sinica B attributed 40 to 50 percent of clinical trial failures to lack of clinical efficacy and about 30 percent to unmanageable toxicity.
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