By Colin Kellaher

Shares of Zosano Pharma Corp. lost nearly half of their value and hit a new all-time low on Thursday after the cash-strapped biopharmaceutical company filed for chapter 11 bankruptcy with plans to close up shop.

Zosano, which has been struggling since the U.S. Food and Drug Administration rejected its M207 transdermal migraine patch in late 2020, had warned last month that it was running low on cash and needed to find substantial funding to continue.

Zosano initially filed for FDA approval of M207 in late 2019, but the agency turned the application away in October 2020. The Fremont, Calif., company, refiled the application in January of this year, but the FDA refused to accept it, saying it didn't consider the resubmission to be a complete response to the deficiencies the agency previously identified.

The FDA in April gave Zosano a 12-month extension to resubmit the filing without considering the application to have been withdrawn, but Zosano later that month suspended the M207 program and slashed its work force in a bid to preserve its dwindling cash pile.

Zosano on Thursday said it is seeking bankruptcy court approval of a variety of so-called "first day" motions aimed at facilitating an orderly wind down of its operations, adding that it plans to sell substantially all of its assets during the bankruptcy case.

Shares of Zosano, which in April effected a 1-for-35 reverse stock split, were recently changing hands at 95 cents, down 46%, after earlier touching an all-time low of 75 cents.

Write to Colin Kellaher at colin.kellaher@wsj.com

$(END)$ Dow Jones Newswires

June 02, 2022 10:50 ET (14:50 GMT)

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