VC-Backed Busts: Dynogen Pharma

#10. Dynogen Pharmaceuticals

Waltham, Mass.-based drug company focused on gastrointestinal and genitourinary disorders.

Dynogen had raised around $67 million between 2002 and 2007, plus a small amount of subsequent debt financing. Backers included Atlas Venture, HealthCare Ventures, Oxford Bioscience Partners, Abingworth Management, Medica Venture Partners and Pappas Ventures.

What happened?
Dynogen is a case of falling very far very fast. The drugmaker agreed in 2007 to a reverse merger with a blank check acquisition company (i.e., a SPAC), which would have brought Dynogen public and paid investors an initial $98 million. But that deal got called off, and the company said it would seek out more venture capital. Okay plan, except that Dynogen’s lead drug candidate soon failed in a Phase IIb trial — causing its investors to support liquidation via Chapter 7 bankruptcy, which was filed for in February.