Sienna Biopharmaceuticals Inc. has filed for bankruptcy with plans to find a buyer or investor during its chapter 11 proceedings, WSJ Pro Bankruptcy reported. The publicly traded drugmaker, whose major investors include Arch Venture Partners, filed its petition on Monday in the U.S. Bankruptcy Court in Wilmington, Del. The move to seek protection from creditors comes about a month after Sienna warned that there were substantial doubts about its ability to continue as a going concern, raised the possibility of a bankruptcy filing and said it had hired investment bank Cowen Inc. to explore financial and strategic alternatives. Westlake Village, Calif.-based Sienna filed for bankruptcy days after its cash levels fell below the minimum prescribed by a credit agreement, a court filing shows. That loan covenant required Sienna to have cash of the greater of $30 million, or $15 million plus its cash burn over the past six months. Sienna had net cash used in its operations of $21.2 million as of June 30, down from $30.2 million at the same point a year earlier, a court filing said. The company, which went public in 2017, also said its ability to raise financing has been hurt by a declining stock price. Last month, Sienna said it was told by the Nasdaq Stock Market that for 30 straight business days its stock had closed below $1 a share, the minimum required for continued listing. Sienna has until Feb. 5, 2020, to regain compliance.
