Genesis Research Development Corporation has ended a proposed merger with a pharmaceutical development company based in Australia.
The company had a memorandum of understanding with Mariposa Health to merge, which would have required Genesis issuing 200 million shares to acquire Mariposa's outstanding capital.
Genesis says it became apparent the original merger deal as it stood, would not work.
Investor Delight Grace took a 17% stake in the biotech company earlier this month.
Genesis Research Development lost $480,000 in 2011 and has struggled to fund its projects with the aim of commercialising them in recent years.