Pivot or Close: What the Last 90 Days of a Biotech Wind-Down Look Like

Most biotech conversations happen on the way up. This one happens on the way down, on the record, from two people who are still close enough to it to remember the sequence. David Esposito is President and Chief Executive Officer of ONL Therapeutics and has built companies to exit and taken companies into bankruptcy. Pavel Khrimian co-founded Deka Biosciences and spent most of 2026 leading it through a wind-down after a pharma collaboration collapsed at the diligence stage.

Lori Ellis asks them about the ninety days before the decision rather than the day of it. Closure is rarely a single event, and both of them describe the same shape: the information was available earlier, in pieces, and the discipline is reading the pieces before they become a crisis.

How much of it is luck

Esposito answers by putting his own record on both sides of the ledger.

“I’ve been in my journey at a couple of good success stories, so to speak, in terms of building and successful with product launches or exits, but also taking a few companies into bankruptcy.”

The controllable part is planning and execution. The uncontrollable part is timing, and timing is what closes the window:

“sometimes the timing on markets to fund the pivot for a company gets pretty tight. And that can set up a real cash crunch for teams.”

Khrimian frames it as a journey rather than a plan, and argues that the obsession with control has to go. Strategy governs what can be de-risked, which is resources and pipeline prioritization. Capital markets, the regulatory environment and drug-pricing policy are not on that list, and a company is still expected to navigate them.

The data points arrive unlabeled

Running a biotech means absorbing bad news at a steady rate, and Esposito is blunt about the frequency:

“There’s kind of a gut punch or a new data point every couple of days, whether it’s a manufacturing, a regulatory hurdle, a clinical site issue.”

The skill is not avoiding them. It is deciding which ones change the base case. He describes a term sheet that was supposed to be a hundred million, dropped to eighty, then oversubscribed to a hundred and twenty five. Each move is a data point off the plan, and none of them arrive labeled as decisive.

“you’ve got to start confidently with a base case and then interpret these data points.”

Khrimian’s addition is about scope. The failure he has watched is not misreading a data point but declining to look at it:

“what I have seen done not so successfully is when some data points are ignored”

The set is wider than the development plan. It includes what pharma partners are signaling, what investors are saying, and the geopolitical picture, because “the ecosystem has become so vast, so large that you have to pay attention to all the data points.”

ONL supplies the worked example of reading one correctly. An acute study was scientifically important, demonstrating that the drug engaged its target and protected retinal cells, but acute is a smaller market. Investors wanted the validation and then wanted the large chronic indications. The company is now running large chronic trials in indications including age-related macular degeneration.

Why everyone says it is about the team

Ellis pushes on a phrase every founder has heard from investors and few can operationalize. Esposito’s version is structural rather than sentimental. A biotech leadership team contains scientists who resolve uncertainty by running another experiment, finance people who know the experiments are finite, and strategy people tracking milestones. He wants that friction, deliberately:

“a good bit of healthy tension in the team to be trustworthy, talk about the issues, but know that at the end of the day, you have to make decisions”

Khrimian extends it downward, past the executive layer, to the people who joined on the strength of the vision and are the ones actually hitting the milestones written into term sheets. When alignment breaks there, the cost is not morale. It is capital, burned on friction on the way to a value inflection point that then arrives late or not at all.

Esposito connects the failure directly to speed of interpretation:

“in my experience of taking a few over the cliff, we probably didn’t have enough dexterity to interpret those data points quickly.”

Doing everything right, and still not being guaranteed

Khrimian says it while still inside the experience:

“You can do everything right. You still are not guaranteed the successful outcome that you want”

Esposito’s counterpart is a warning about optimism, which he treats as a required gear rather than a flaw. Belief is what gets a leadership team over obstacles, and it needs checking against the cash position:

“sometimes you get that belief of overcoming too far over your skis. And before you know it, you’re looking over the abyss”

Pivot or close, in three questions

Khrimian reduces the decision to three tests, applied in order. Do you have a credible hypothesis, or an asset. Then:

“Do I have enough cash to test that hypothesis?”

“do I have enough time and money to build to a credible, realistic value inflection?”

If two of the three come back no, or go sideways, the answer is closure rather than a pivot. He distinguishes the cheap pivot from the expensive one using the cell-therapy market: companies that moved CD19 and CD20 programs from oncology into autoimmune disease redirected an existing molecule without new manufacturing work. Replacing a failed lead molecule and pushing a new one down the same path is a different problem, and it requires either money or investors willing to fund a bridge.

Esposito’s version is about optionality running out quietly:

“after a couple rounds of capital and the science is playing out, you eventually realize you’ve prioritized yourself into maybe one big swim lane.”

Once a company is in that lane, waiting on a binary readout with no backup, the decision is largely made. He is clear that this is the easy case. The hard cases are the ones where the data is not good and is not bad.

Carrying the news

Khrimian negotiated for months, finalized a term sheet, completed diligence, and watched the counterparty change direction. What he holds onto is the conduct:

“we didn’t burn bridges along the way. It’s an ecosystem. It’s a small world.”

Esposito supplies the version with no options left. A strategic pulled out late in the year, too late to get on anyone’s January calendar at the industry’s main financing conference:

“you’re careening to a cliff with about 200 grand in the bank and you’re forced to wind down.”

The obligation that outlives the company

Ellis asks how a leader serves investors, patients and employees at once when the money is running out. Khrimian answers with advice he was given about perspective:

“before you get into somebody else’s shoes, there’s one other step you have to go through. Take your own shoes off”

Then he answers it operationally:

“We have the fiduciary responsibility to continue to treat these patients until they come off therapy.”

A wind-down becomes a logistics problem. Drug has to keep shipping, sites get narrowed to a viable few, and cost gets cut everywhere except there, to “focus on making sure that patients are not left behind.”

Esposito closes on the people. Nobody in a failed program did anything wrong, and the network is expected to absorb them:

“even if you have to make those difficult decisions on transitioning people out of the company, you do all you can to find them a good spot.”

Neither of them is finished. Khrimian, who describes himself now as “an operator, biotech company builder,” wants another attempt and says the last seven years taught him he is comfortable with the discomfort. Esposito recently made the harder version of the call at a company that is not out of money, cutting good programs and good people because resources are finite, and says it is still raw.

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