Drug developer Argos Therapeutics won’t be moving into new office space on N.C. State University’s Centennial Campus after all. Its lease there was terminated earlier this month, the company revealed in a Securities and Exchange Commission filing.
Argos’ expansion to N.C. State’s Centennial Campus was announced in January. The Durham company planned to lease a 40,000-square-foot facility that would be used for the commercialization of its experimental kidney cancer drug.
Argos had planned to invest $10 million and create 70 new jobs over the next few years at the facility. But the company reported that its Centennial Campus landlord, Keystone-Centennial II, terminated the lease on March 17 effective immediately. Argos revealed the termination in a filing on Thursday.
Argos never occupied the leased space at N.C. State.
“In the termination notice, the landlord asserted that (Argos) was in default under the lease due to nonpayment of invoices for up-fit costs,” the company said in the filing. The company added that it would not dispute the occurrence of default or the termination of the lease and won’t seek “to cure the default.”
The filing adds that Keystone-Centennial II states Argos is liable for any costs “incurred by the landlord in re-letting the premises, any deficiency between the company’s scheduled rent for the remainder of the term of the lease and the rent charged to the new tenant, the unamortized portion of the funded up-fit costs, rent abatement, interest at the rate of 12 percent per annum on the sums noted and all attorneys’ fees incurred by the landlord in enforcing the lease.”
Argos, however, does dispute liability for some of those costs, the filing states.
The termination of the N.C. State lease comes two weeks after the drug developer reduced its workforce by 38 percent, from 122 employees to 76. The company is attempting to preserve its cash resources after its experimental kidney cancer drug posted negative results in phase 3 trials.
An independent data monitoring committee recommended in February that the company discontinue clinical trials for the kidney cancer drug, which caused the company’s stock price to plunge 65 percent in one day.
In its recent annual report, Argos said it currently does not have sufficient cash resources to continue business operations beyond next month, and that is seeking to raise additional capital. The company also stated that it could seek to sell the company, sell its assets or instead “determine to dissolve and liquidate our assets or seek protection under the bankruptcy laws.”
Argos posted a net loss of $53 million in 2016 on revenue of more than $945,000. In 2015, the company reported a loss of $74.8 million on more than $518,000 in revenue.
Shares of the company were trading at 50 cents Thursday afternoon, down 23 cents – or 31 percent. The company’s stock price has fallen 90 percent since the beginning of the year.