The stock of Array Biopharma Inc (NASDAQ:ARRY) closed at $12.54 losing 4.44% in yesterday’s trading session. This boulder drug development company spun off its cardiovascular myopathy drug research into a new separate company. And it hopes that will move along way helping treat the rare degenerative heart disease.
On Chistmas Eve, Array BioPharma proceeded to make a filing to the U.S. Securities & Exchange Commission. It disclosed that it made contributions in terms of intellectual property, clinical trial data, equipment, inventory as well as other materials related to its experimental cardiomyopathy drug to Yarra Therapeutics which happens to be its subsidiary.
A person familiar with the matter said, “The oral drug, known only as Array 797, is being developed to treat ‘lamin A/C-related dilated cardiomyopathy,’ which is caused by a specific gene mutation. The disease is estimated to occur in about 6,000 to 10,000 U.S. patients.”
Back in 2016, Array proceeded to raise about $10 million through the issuance of promisory notes and reports indicate that they were bought using funds emanating from the Red Mile Capital. One of the executives working with the company revealed that the spinoff had been a possibility way back in Sept. 2, 2016.
It was in September when the promissory notes came due and one notable thing is that the company had the choice to move ahead and spin off its 797 research into a subsidiary.
One point worth noting is the fact that Yarra is in a position to raise enough money from its large number of investors. And the most interesting bit is the fact that the promissory note can be repaid using shares in the new subsidiary and that is according to indications from Array’s regulatory filings.
Bryan Stuart is the one that has been named to serve as the CEO and president of Yarra Therapeutics. Previously, he has had the opportunity to work with a wide range of other organizations where he is said to have advocated for teamwork in helping the companies scale to higher levels of business success. It is difficult to tell at the moment whether or not Array will maintain its control of Yarra in future.