Another one bites the dust.

The saga of Precision Therapeutics, a Pittsburgh biotech developing what struck me last August as a particularly crude type of cancer-chemotherapy diagnostic, continues apace. In a tersely worded press release, the special-purpose acquisition company Oracle Healthcare Acquisition said it has terminated its planned merger with Precision. The release blamed “currently prevailing market conditions” for the decision, which carries some fairly ominous consequences for both sides.

Oracle’s plight is fairly simple: The blank-check company will now dissolve itself and return the money it raised, minus expenses, to investors. For Precision, however, the outlook is much starker. The merger would not only have taken the company public, it would have left Precision with $120 million in cash, ample resources to bolster sales of its ChemoFx test and to develop new potential products.

Now, after getting jilted at the altar by Oracle and withdrawing its IPO, the startup is most likely almost out of cash. As of September 30, Precision had only $15.6 million in cash and cash equivalents and a working-capital deficit of $1.1 million against debts of $17 million — plus a burn rate of roughly $3 million a quarter. Those numbers don’t look good by any measure

The first real sign the merger was in trouble came just about two weeks ago, when Oracle and Precision effectively cut the overall size of the deal by 15 percent — never a good sign. Oracle’s decision to walk away remains murky to me given the complexity of the deal, and external market events might have somehow triggered provisions that made the acquisition untenable. But I can’t help wondering if the buyers may have simply concluded that Precision’s prospects weren’t at all what they once thought.

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