Third Harmonic Bio to Liquidate, Sell Off Urticaria Drug Asset

Third Harmonic Bio, a biotech company focused on developing treatments for inflammatory diseases, has announced plans to liquidate its business and sell its lead drug candidate for chronic spontaneous urticaria (CSU). This decision marks a significant shift in strategy for the company, which had previously intended to advance its KIT inhibitor, THB335, into phase 2 clinical trials.

Company Liquidation and Asset Sale

Third Harmonic Bio's board of directors and management team have concluded that the best path forward is to return cash to shareholders and sell the company's assets. CEO Natalie Holles stated, "We are proud of the work that our team has done over the past years to advance our science, to make tough decisions, and to act with integrity in the best interest of our patients and shareholders."

The company plans to complete all phase 2 readiness activities for THB335 by mid-year, aiming to secure the best possible price from potential buyers. A stockholder meeting is scheduled for June 5 to vote on the dissolution plan, which would result in Third Harmonic delisting from the Nasdaq and filing a certificate of dissolution.

Financial Implications

As of April, Third Harmonic Bio reported approximately $272 million in cash reserves. The company estimates that between $246.6 million and $259.8 million will be available for distribution to shareholders, excluding any proceeds from the sale of THB335. This translates to an estimated $5.13 to $5.42 per share of common stock.

Third Harmonic expects that its existing capital resources, combined with proceeds from selling certain clinical assets, will be sufficient to cover its remaining financial obligations.

THB335 Development and Potential

Despite the decision to liquidate, Third Harmonic Bio maintains confidence in the potential of THB335. Results from a phase 1 trial in healthy volunteers demonstrated dose-dependent reductions in serum tryptase, a biomarker of mast cell activation. This data suggests that THB335 could still hold promise as a treatment for CSU, potentially making it an attractive asset for acquisition by other pharmaceutical companies.

The decision to sell THB335 comes after the company had already made significant cuts, including halving its workforce in February and discontinuing other R&D projects to focus on this lead candidate. These moves underscore the challenging environment facing biotech companies, particularly those with early-stage assets, in the current market.