ARYx Therapeutics said it will wind down its operations due to lack of funding after the FDA delayed providing guidance on the trial design of its experimental drug for gastrointestinal disorders, according to Reuters.
In its latest communication with ARYx, the FDA suggested a response on the company's request for a special protocol assessment will not come until July 2011 at the earliest.
FDA was initially supposed to respond to ARYx's request on the drug, naronapride, by Nov. 5, 2010, but had informed the company that the response would be delayed until the end of March.
ARYx said it would start winding down operations effective immediately, to be executed in cooperation with ARYx's largest secured creditors, including Lighthouse Capital Partners V and MPM Capital.
The company said it is likely holders of Aryx common stock and other securities will receive no recovery.
ARYx has been pursuing interim financing and had secured a non-binding term sheet from an investor consortium. However, following the delay in the FDA's response, the consortium has withdrawn all potential financing arrangements.