Waltham, MA-based Forum Pharmaceuticals, which spent more than decade pursuing a drug for Alzheimer’s and other neurological diseases, is shutting down, Xconomy has learned.
According to a Forum spokesperson, the company will be closed “by the end of the week.” The process appears to have begun already: Forum’s website is no longer operating, and as Xconomy recently reported, former CEO Deborah Dunsire left the company near the end of May. At the time, Forum wouldn’t confirm whether the company was winding down or not.
Forum, which has been bankrolled primarily by a unit of the money management giant Fidelity Investments for more than a decade, suffered two devastating setbacks in the past year. In September 2015, the FDA placed a clinical hold on two late-stage Alzheimer’s disease studies of Forum’s lead drug encenicline, citing gastrointestinal safety problems. This March, the drug failed two Phase 3 trials in schizophrenia. Without other drug prospects close to market, Forum was left with few options.
“I was very surprised to hear that the schizophrenia study failed, especially since the [data from mid-stage trials] were so convincing,” says Kees Been, who was Forum’s CEO from 2005 to 2013.
When it announced the schizophrenia failure in March, Forum had 130 employees. It said it would restructure and “evaluate a potential path forward, if any.”
Two months later, Dunsire left Forum and told Xconomy that encenicline would have to move forward with a different company or investor. But she and others stopped short of saying that Forum would shut down. That confirmation finally came today after Xconomy asked a spokesman about the website going dark.
Forum was founded as EnVivo Pharmaceuticals in 2001. The main backer was the newly-formed Fidelity Biosciences (now known as F-Prime Capital). There were other investors, but they were inconsequential. The startup got special treatment and wasn’t subject to the same calculations as the rest of the Fidelity portfolio.
That’s because former Fidelity CEO Ned Johnson’s passion and support for Alzheimer’s research was the driving force behind Forum. Fidelity poured hundreds of millions of dollars into the company over the years; it became Forum’s sole owner in 2008.
It was an unusual effort by biotech startup standards. As Atlas Venture partner and former Fidelity Biosciences co-founder and partner Jason Rhodes told Xconomy last year, Forum was a “very specific, mission oriented business,” different than other biotechs Fidelity’s venture groups have invested in.
Because of Fidelity’s ownership position, Forum had no need for deals or outside investors to survive. As Been (now the CEO of Lysosomal Therapeutics) said last year, the company had aimed to stay private, retain as much value as possible, and commercialize its own drugs despite the prohibitive cost. Been called the special relationship with Fidelity “a gift.”
“This clearly wasn’t a typical VC-backed [biotech] story,” he says today.
But Dunsire, the former Millennium Pharmaceuticals CEO who took the helm in 2013, planned to find outside investors and shoot for an IPO—so long as encenicline came through. Those plans fell by the wayside when the drug came up short.
Dunsire and remaining executives at Forum did not immediately return requests for comment.