Recently, US biotechnology company Nido Biosciences announced via LinkedIn that it is officially ceasing operations because its core pipeline , NIDO-361 , failed to meet its primary endpoint in a global Phase 2 clinical trial .

Biotech, which had received $109 million in funding from institutions such as Eli Lilly and was hailed as "the most promising next-generation biotech startup," ultimately failed at the finish line of its Phase 2 clinical trial.

01

The Fall of a Star Biotech

Founded in 2020 and incubated by renowned venture capital firm 5AM Ventures, Nido Biosciences focuses on developing innovative drugs to treat neurological diseases. Its core product, NIDO-361, targets spinal bulbar muscular atrophy (SBMA, also known as Kennedy's disease), a rare X-linked recessive neuromuscular disease that primarily affects adult men, with an incidence rate of 1-2.5 per 100,000.

In 2023, Nido Biosciences completed its Series A funding round, co-led by 5AM Ventures, Abingworth, and Bessemer Venture Partners, with participation from pharmaceutical companies Eli Lilly and Osage University Partners. Subsequently, the company completed its Series B funding round, led by Bioluminescence Ventures, bringing its total funding to $109 million . In early 2024, the company was ranked fifth among the "Most Promising Next-Generation Biotech Startups" by industry media BioSpace.

It's worth noting that the company's CEO, Jeremy Springhorn, has over 20 years of experience in the biopharmaceutical industry, having previously worked at Syros Pharmaceuticals, Flagship Pioneering, and Alexion Pharmaceuticals. The management team possesses professional backgrounds in neuroscience drug development.

The core pipeline NIDO-361 works by binding to a unique site on the androgen receptor, correcting transcriptional dysregulation, and thereby improving muscle function in patients with SBMA.

In late 2023, the company released Phase 1 clinical trial data for NIDO-361 in healthy volunteers, showing good drug safety with no serious adverse events . Interim analysis results based on muscle MRI measurements supported the hypothesis related to disease progression.

In 2024, Nido Biosciences initiated a global Phase II clinical trial of NIDO-361 for the treatment of SBMA patients. This multicenter trial, conducted in Denmark, Italy, South Korea, and the UK, enrolled 54 adult patients. The primary endpoint was to assess whether once-daily oral NIDO-361 significantly increased thigh and overall lean body mass over a 12-week treatment period. Lean body mass was chosen as the endpoint because of its objective and quantifiable characteristics in muscular dystrophy, and is considered to reflect disease improvement.

However, preclinical data and early clinical results never equate to final victory.

In December 2025, the final data analysis for the Phase II clinical trial of NIDO-361 was completed. The results showed that NIDO-361 failed to meet the pre-specified primary endpoint, and the trial data did not show statistical significance.

In January 2026, the company announced that, based on this result, it would cease all of its operations.

In a public statement, Dr. Springhorn, CEO of the company, stated that this result has a significant impact on the company team and the SBMA patient community. Because the trial failed to meet expectations on its primary endpoint and no clear subgroup positive signals or safety issues were observed, there is a lack of scientific basis for further progress on the project.

It is worth noting that there are currently no approved disease-modifying therapies for Kennedy's disease; only symptomatic treatments such as muscle relaxants tizanidine and baclofen are available on the market. The failure of the NIDO-361 clinical trial has deprived the field of a potential treatment option for this disease. For the families of patients who participated in the trial, this means that the time and expectations they had invested failed to translate into actual treatment benefits.

02

Several biotech companies have gone bankrupt.

Nido's downfall is by no means the end of the 2026 biotech bankruptcy wave; it may just be the beginning.

several biotechnology companies have closed down both domestically and internationally . From Nido Biosciences to Rampart Biosciences, from neuroscience to gene therapy, this wave of closures continues the industry adjustment trend expected in 2025, exhibiting new characteristics.

To date, biotechnology companies that have explicitly announced closure or filed for bankruptcy include:

Rampart Bioscience : Once a shining star in the field of gene therapy, it officially debuted in October 2023 with a massive $125 million funding round, focusing on non-viral vector delivery platforms. Its first project targeted the rare disease hypophosphatase and was highly anticipated by the industry. However, this star quietly fell in early 2026. According to former employees, the company closed in early January without issuing any public statement, bidding farewell to the stage in an almost silent manner.

Areteia Therapeutics , which once amazed the industry with a $425 million Series A funding round and became a shining star in the field of respiratory diseases, saw its core product, dexramipexole, evolve from treating amyotrophic lateral sclerosis (ALS) to eosinophilic asthma, and was once seen as a breakthrough hope for oral therapy. Although the Phase III Exhale-4 study, announced in September 2025, met its primary endpoint, data from the low-dose group was missing, and the efficacy depth was insufficient, failing to translate into clear clinical value. The company terminated the Exhale-2 and Exhale-3 trials, and the CEO and CFO subsequently resigned, ultimately leading to its quiet closure.

These closed companies all follow the same pattern— their fate is determined by clinical data from their core pipeline .

In its failure statement, Nido explicitly stated that the trial failed to meet its pre-specified endpoints and lacked positive signals in the subgroups, rendering the company unprofitable after the research was terminated. While Rampart did not disclose details, its rapid depletion of funds after its 2023 funding round suggests that clinical progress did not meet expectations.

This forms a continuation of cases from the end of 2025: Areteia Therapeutics (which closed in December) raised $425 million but dissolved because its asthma drug failed to prove clinical value; Mythic Therapeutics (which closed in December) had promising ADC drugs, but failed to secure funding after the initial enthusiasm of investors waned.

Clinical practice has become a clear dividing line; poor data triggers liquidation, leaving almost no room for adjustment or refinancing.

At a deeper level, the rapid shakeout in 2026 stems from the continued deterioration of the capital environment . In 2025, more than 16 biotech companies worldwide officially closed, and Fierce Biotech tracking data showed that 20 companies announced layoffs that year. Entering 2026, this trend did not ease; instead, it intensified at the beginning of the year.

Secondly, investment institutions adopted a zero-tolerance strategy for failure . When Nido completed its financing in 2023, the market was still able to accept early-stage risks; however, investors in 2026 demanded that clinical data be successful on the first attempt. Strategic investors such as Eli Lilly chose to cut their losses rather than continue to inject capital after the data became clearly negative. Even with substantial financing, Nido's cash reserves were insufficient to sustain it until the next data milestone.

a delayed liquidation of the capital bubble of 2020-2023 . Those three years saw an overheated global investment in biopharmaceuticals, giving rise to a large number of projects with inflated valuations and weak scientific foundations. Back then, the market was willing to pay a premium for the story; now, it only looks at the data.

03

Conclusion

In 2026, biotech companies will be undergoing a brutal structural differentiation. Companies lacking clinical validation capabilities, relying on a single pipeline, and lacking capital efficiency will continue to be eliminated, while companies with products, data, and international capabilities will see a profit inflection point and valuation recovery. The industry's hope lies not in an overall recovery, but in the efficiency improvement resulting from the concentration of resources in the leading companies —approximately 20% of high-quality companies will occupy 80% of the capital and resources.

For entrepreneurs, Nido's case serves as a cautionary tale: maintain financial discipline during periods of ample capital, uphold scientific rigor in clinical development, and avoid relying on a single pipeline. The future survival strategies will place greater emphasis on differentiated validation of technology platforms, continuous verification of business development and fundraising capabilities, and proactive planning for internationalization.

The industry is going through a painful period of adjustment, but it is also a period of value reassessment. Only companies that can adapt to the new rules will be able to survive and thrive in 2026.

https://news.yaozh.com/archive/47007.html