Axcella Health Becomes the Latest Flagship Company to Close its Doors



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Axcella Health will become the latest Flagship Pioneering-founded company to shutter its doors, according to an SEC filing this week.

Axcella’s stockholders voted in favor of approved liquidation and dissolution of the company and authorized the board of directors to proceed with the planned closure. Stockholders also voted to transfer Axcella’s assets “through an assignment for the benefit of creditors.” The filing provided no details on what will happen to its assets or employees.

The company appeared on the surface  to have a positive start in 2023. Axcella’s’s drug for treating prolonged COVID-19 fatigue was moving forward in January. The U.K.’s Medicines and Healthcare Products Regulatory Agency had given the medication AXA1125 its blessing. It had also filed an investigational NDA with the FDA.

However, Axcella’s journey had taken a turn in August 2023 as the drug did not reach its primary endpoint in a Phase IIa study. Still, the company did tout some positive elements of the trial, with other investigation points having better statistical results.

The headwinds began to build for Axcella in December last year, as the company announced it would shift from its nonalcoholic steatohepatitis (NASH) treatment and focus on long COVID. The company also slashed its headcount by 85% at the time. Axcella stated at the time that it was stopping the Phase IIB trial of its endogenous metabolic modulator but also announced that it may restart a NASH program.

Axcella is not the only company Flagship founded to face the closure of its doors. In November 2023, microbiome biotech Evelo Therapeutics ceased operations following several Phase II failures and a stock falloff.

In August 2022, Kaleido Therapeutics, another microbiome-specific company founded by Flagship, announced it would end all operations, lay off its entire staff and delist from the Nasdaq. Kaleido was handed a warning letter in 2021 from the FDA, stating that the company had failed to seek an investigational NDA for a study using its COPD drug, while arguing the candidate was a food rather than a medicine and did not need to be authorized under an IND.

Tyler Patchen is a staff writer at BioSpace. You can reach him at Follow him on LinkedIn.

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