BioCentury
ARTICLE | Strategy

Giving the money back

March 16, 1998 8:00 AM UTC

Shareholders come last in the queue of potential beneficiaries when a company begins to go under. Thus the notion that a biotech company would give money back to its investors when its technology fails to pan out is a novel one. However, giving money back before a company is ready to call it quits creates the possibility that management will lack the resources to continue meaningful development, particularly if a technology setback has made it difficult to raise new money.

Last week, with $38.6 million in cash as of Dec. 31 and with no plans to close its doors immediately, the board of Cambridge NeuroScience Inc. declared a $1 dividend to shareholders payable on April 14. The company also reduced its staff by half - from 60 to 30 - and said it will sell assets if it can generate more value from the sale than its share price currently reflects...