Viracta Therapeutics Shuts Down Operations Amid Financial Struggles

Viracta Therapeutics, a biotechnology company focused on developing treatments for Epstein-Barr virus-positive (EBV+) cancers, announced on Wednesday that it will cease operations and lay off all remaining employees. This decision, approved by the company's Board of Directors on Monday, marks the end of a tumultuous period for the once-promising biotech firm.

Financial Turmoil and Delisting

The closure comes in the wake of Viracta's delisting from the Nasdaq stock exchange last month due to failure to meet the minimum share price requirement. This delisting was the culmination of a series of financial setbacks that plagued the company throughout 2024.

In an effort to conserve resources, Viracta implemented multiple rounds of layoffs last year. The company first announced a 23% reduction in headcount in August 2024 as part of a "resource realignment initiative." This was followed by another 42% staff reduction in November, as Viracta attempted to redirect its dwindling resources towards its EBV+ lymphoma program.

Pipeline Setbacks and Final Attempts at Solvency

Despite these cost-cutting measures, Viracta was forced to terminate its EBV+ lymphoma program in December 2024. The company emphasized that this decision was not due to safety concerns but rather an attempt "to maximize its cash runway" while the Board searched for alternative routes to solvency.

Prior to its closure, Viracta had been developing nana-val, a combination treatment of the investigational drug nanatinostat and the antiviral agent valganciclovir. Phase II data from the NAVAL-1 trial had shown promise, with nana-val demonstrating a 33% overall response rate, including a 19% complete response rate, in patients with EBV+ peripheral T-cell lymphoma.

Corporate Restructuring and Shutdown Details

As part of the shutdown process, Viracta's Board of Directors and top executives, including CEO Mark Rothera and Chief Medical Officer Darrel Cohen, resigned days before the announcement. Craig Jalbert, principal at the accounting firm Verdolino & Lowey, P.C., has been appointed as Viracta's CEO, president, chief financial officer, treasurer, corporate secretary, and sole member of its Board to oversee the closure.

The company expects to incur a one-time charge of approximately $100,000, primarily for staff wages and severance payments. Jalbert will be compensated $50,000 per year for three years to manage the wind-down of operations.