Clearside Biomedical Plunges 68% After Filing for Chapter 11
The biopharmaceutical company will pursue a strategic sale of its assets, including its commercial eye-disease therapy, through a court-supervised auction.
Shares of Clearside Biomedical Inc. (NASDAQ: CLSD) collapsed in Monday trading after the company announced it has filed for Chapter 11 bankruptcy protection in a move to facilitate a strategic sale of its business.
The stock plummeted by more than 68%, falling to a new 52-week low of $0.85 per share and wiping out the majority of its market value. The sell-off was a direct response to the company's plan to use the court-supervised process to auction its assets, casting significant doubt on the future for current shareholders.
Clearside, a biopharmaceutical firm focused on treatments for vision-threatening diseases, said the voluntary filing in the U.S. Bankruptcy Court for the District of Delaware is intended to maximize the value of its assets. The company plans to conduct a sale under Section 363 of the U.S. Bankruptcy Code, an auction process designed to secure the highest possible bids for its intellectual property and commercial products.
"After thoroughly evaluating all our strategic options, we determined that this court-supervised process is the best way to maximize value for all our stakeholders," the company stated in a press release issued Monday morning.
The assets up for sale are significant within the ophthalmology sector. They include Clearside's proprietary SCS Microinjector® delivery platform, which targets the back of the eye, and its commercial product, XIPERE. XIPERE is a triamcinolone acetonide injectable suspension approved for the treatment of macular edema associated with uveitis, a form of eye inflammation.
Also on the auction block is CLS-AX, a Phase 3-ready treatment candidate for wet age-related macular degeneration (wet AMD), and the company's existing licensing collaborations. The decision to sell comes amid mounting financial pressure, including declining year-over-year revenue and negative operating margins, according to recent financial data.
The market's reaction was swift and severe. By mid-morning, Clearside's stock was trading at $0.847, a decline of 68.27% from its previous close of $2.69. The stock's 52-week high stands at $17.10, illustrating the dramatic erosion of investor confidence over the past year. The company's market capitalization shrank to approximately $14.2 million following the announcement.
Chapter 11 bankruptcy allows a company to continue operating while it reorganizes or, in this case, sells its assets. Clearside has stated it intends to continue business operations throughout the sale process. However, in such proceedings, the recovery for existing equity holders is often minimal or nonexistent, as proceeds from asset sales are typically used to pay off creditors first.
As of the announcement, no "stalking horse" bidder—an initial bidder that sets a floor price in a bankruptcy auction—has been publicly identified. The company and its advisors will now solicit bids from interested parties in the coming weeks, with the process culminating in a court-approved auction. The outcome of that sale will determine the ultimate value recovered from Clearside's innovative technology and commercial portfolio.