Bio Pete, just so you know they're not slackers they changed their opinion tonite:
Terminating Coverage Based on Chapter 11 Filing
We are terminating coverage of Tapestry Pharmaceuticals. Tapestry today initiated steps to file for bankruptcy protection under Chapter 11 of the Bankruptcy Code. TPPH also has effected a reduction in its operations by eliminating 65% of its work force (22 positions). TPPH terminated the employment agreements with the CEO, CFO, COO, and CMO and listed their severance packages. It is currently anticipated that each of these employees will provide ongoing services under at-will employment arrangements that are currently being finalized. The company also expects to terminate its existing facility leases. While the costs associated with those terminations cannot be determined at this time, the amount could be as high as $2.7mm.
TPPH's pursuit of finances unsuccessful. Over the past year, TPPH has pursued without success a variety of possible transactions to finance its operations through the sale of securities or to establish a strategic alliance, or, in the absence of such financing, to sell the company. As of February 8, 2008, TPPH had approximately $100,000 of cash and cash equivalents and has accounts payable and accrued liabilities of approximately $6.5mm.
TPI 287 is still a viable asset. In our view, TPI 287 is a reasonable product candidate on the cusp of fulfilling its potential in cancer chemotherapy. TPPH has successfully completed two Phase I trials, while two Phase II trials are currently ongoing. Recall Tapestry had announced earlier last year that they had initiated a Phase II open- label, multi-center study of TPI 287 in patients with advanced pancreatic cancer and in advanced hormone refractory prostate cancer (HRPC). Development of the oral formulation of TPI 287 is at an advanced stage showing robust bioavailability and could potentially be the first oral taxane to enter the clinic. We believe TPPH has an attractive product for companies interested in making an entry into the solid tumor space.
Our previous rating on the shares of TPPH were Market Outperform before we elected to terminate coverage. We believe the inability of Tapestry pharmaceuticals to raise capital from the capital markets to fund further clinical, regulatory, and day-to-day operations has led the company to initiate bankruptcy proceedings. As there is no immediate potential for growth, and as it is difficult for the company to continue development of their promising compound we are terminating our coverage.
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