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BERKELEY HEIGHTS, NJ - Cyclacel Pharmaceuticals , Inc. (NASDAQ:CYCC), a micro-cap biotech company with a market capitalization of $2.2 million, has announced the voluntary liquidation of its UK subsidiary, Cyclacel Limited, as part of a strategic move to reduce operating costs and focus on key drug development. According to InvestingPro data, the company has been quickly burning through cash, with revenue declining by 81% in the last twelve months. The liquidation, which was reported on January 31, 2025, is in line with the company’s previously disclosed strategy to explore strategic alternatives.
The company’s board of directors resolved to place Cyclacel Limited into a creditors voluntary liquidation (CVL), appointing James Hopkirk and Carrie James of Kreston Reeves LLP as joint liquidators. With a concerning current ratio of 0.77, indicating short-term obligations exceed liquid assets, Cyclacel Pharmaceuticals aims to acquire plogosertib, a Polo-like kinase inhibitor that has reached Phase 1 clinical studies, from the liquidators. The company intends to progress the drug’s program by developing a new oral formulation with improved bioavailability.
As a result of the subsidiary’s liquidation, Cyclacel Pharmaceuticals will no longer have control over Cyclacel Limited, leading to the deconsolidation of the subsidiary’s financial results from the parent company’s. This action is expected to increase the parent company’s stockholders’ equity by approximately $5.6 million, which will be reflected in the upcoming Form 10-Q for the quarter ending March 31, 2025.
Additionally, the subsidiary’s other drug development program, fadraciclib, is being marketed for sale by the liquidators through Hilco Appraisals Limited. The sale of fadraciclib indicates Cyclacel Pharmaceuticals’ decision to narrow its focus solely on the development of plogosertib.
The company’s forward-looking statements caution that there are risks and uncertainties that could affect the actual outcomes, including the potential acquisition of plogosertib. Investors are advised to consider these factors, detailed in the company’s filings with the SEC, including risk factors in its Annual Report on Form 10-K for the year ending December 31, 2023, and other subsequent filings.
This news is based on a recent SEC filing by Cyclacel Pharmaceuticals, Inc.
In other recent news, Cyclacel Pharmaceuticals has made significant amendments to its corporate governance and financial reporting. The company recently corrected an error in a Securities Purchase Agreement, clarifying that David E. Lazar was not appointed as a member or Chairman of Cyclacel’s board of directors. Instead, Lazar’s role was limited to appointing a single member to the board, leading to the nomination of David Natan, who now chairs the audit committee.
In another development, Cyclacel has changed its independent registered public accounting firm. The company’s Audit Committee approved the dismissal of Crowe LLP and immediately engaged Bush & Associates CPA LLP for the fiscal year ending December 31, 2024. This decision followed a disagreement over the classification of certain warrant provisions, potentially affecting the equity classification of the warrants and the fairness of financial statements.
These recent developments underscore Cyclacel’s commitment to maintaining transparent and accurate corporate governance practices. The company continues to focus on the development of innovative cancer treatments, with a diverse portfolio of products in various stages of clinical and preclinical development.
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