San Francisco-based Diobex has folded. The not-so-well-known drug developer announced today that it has fired all of its employees and is looking to sell off all its assets. An email to the company returned an undeliverable response while a call to the company’s main office (415) 551-0400‎ generated a “not-in-service” message. The DiObex website is also not up.

DiObex only had two products in development. The first was DIO-902, an enantiomer of the antifungal drug ketoconazole (levdexketoconazole), which was in development as a cortisol inhibitor. The company presented data last year at the American Society for Clinical Pharmacology and Therapeutics annual meeting and touted its efficacy in Type 2 diabetes. However, if you go to DiObex’s licensor’s website (www.cortendo.com), you can see that they returned the rights to Cortendo just one month later after a safety board noticed elevated liver enzymes in some patients:

A few patients with elevated liver enzymes have been detected in the ongoing study. In conclusion, the scientific advisory board recommends continuing both protocols, DIO-502 and DIO-503 without modifications. The investors financing DiObex has interpreted this to a reduced likelihood of success, and that the costs of introducing the product to the market will increase. At termination of the study DiObex will return all licensed assets to Cortendo.

Whether the elevated enzyme issue was known at the time of the presentation or not is not known.

DiObex also had a second product: DIO-901, a low dose, extended release formulation of glucagon delivered through an auto injector before bedtime. 901 was in development for the prevention of nocturnal hypoglycemia induced by insulin intensification and had received Fast Track status from the FDA. The product’s current status is unknown.

Venturewire is reporting that the company was unwilling to raise additional capital at a less than attractive valuation, and so decided to axe its 8 employees and sell the asset.

DiObex ate up $30M in its 2003-9 lifetime, with funding provided by Domain Associates, Inventages Venture Capital, Pequot Ventures and Sofinnova Ventures.

As for DIO-901, it’s currently looking for a home, but our thoughts are that if DiObex and its VCs were too unreasonable and unrealistic to raise more funding and give up more of the company, then they will be highly disappointed when the asset winds up on Ebay with no takers.

Let the bidding start at $5…

Image from mitsuiventures

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