It’s one of the most elusive events in biotech: the liquidation.

But after a trial failure of epic proportions – and a collapse in its stock to match – Celladon Corp (NASDAQ:CLDN) says that may be its only option. The developer of gene therapies in a business update Friday morning said that though it had hired Wedbush PacGrow Healthcare to evaluate a merger or sale, winding down entirely and returning cash to shareholders was also on the table.

Celladon’s stock fell in April when its only clinical-stage program, a gene therapy called MYDICAR, failed to keep heart failure patients out of the hospital any better than a placebo. Prior to the results, the stock traded as high as $28, for a market value of almost $700 million. Two months later and the stock hovers just above $1.00.

Welcome to biotech.

Celladon estimates that if it does liquidate next quarter, cash available for distribution to shareholders would be approximately $25-$30 million, or around $1.25 per share. The company ended the first quarter of the year with $70.6 million in cash and $10 million in debt. That $35 million difference just goes to show that winding down a business isn’t as easy – or cheap – as shareholders might like to think.

In a statement on Friday, CEO Paul Cleveland said, “Our Board of Directors has unanimously determined that seeking a merger or sale, in lieu of further development of our remaining programs and assets, gives us the best opportunity to maximize shareholder value. We are aggressively pursuing that course. If we are unable to identify a merger or sale that provides superior value to our shareholders, we will move forward with a liquidation and distribution of net cash to shareholders.”

Though failures are common-place in the biotech sector, it’s not often that small publicly traded companies choose to wind down operations completely. Affymax did just that in 2014 after its once-promising anemia treatment, Omontys (peginesatide), was pulled from the market for serious hypersensitivity reactions, including anaphylaxis (which we wrote about at PropThink). The company dissolved, returning less than $4 million to its shareholders.

Selling the pieces off for scrap is the exception, not the norm, in this sector. Instead, rallying around a re-hashed analysis of the failed data, or another pipeline asset, is the most common outcome. Perhaps Celladon, with limited resources and a bevy of damaged shareholders, should be applauded for owning up to its current situation.

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