Biovest files for Ch. 11 bankruptcy protection
Tampa, Fla.-based Biovest International has filed a petition for protection under Chapter 11 of the U.S. Bankruptcy Code and a Plan of Reorganization seeking to implement a restructuring of its balance sheet that would eliminate approximately $44 million in senior secured debt held by Laurus/Valens Funds and Corp Real, while also providing up to approximately $5.6 million in new operating funding.
Biovest expects the plan would significantly strengthen its balance sheet and support ongoing strategies to commercialize its BiovaxID personalized cancer vaccine, including facilitating ongoing partnering/licensing initiatives, as well as enhancing the opportunity to secure new contracts establishing its hollow fiber bioreactors as a novel cell culture platform for viral vaccine production.
During this reorganization process, Biovest plans to continue its operations without interruption, including advancing its regulatory strategy seeking approvals for BiovaxID in the European Union and Canada for the treatment of follicular non-Hodgkin's lymphoma. Biovest plans to file these formal marketing applications following completion of its reorganization with regulatory decisions anticipated in 2014. If approved, BiovaxID would be the first cancer vaccine available for lymphoma patients. Biovest also will continue to service its cell culture and instruments clients from its Minneapolis bio-manufacturing facility without interruption.
Based on filings made to the Bankruptcy Court, Biovest will seek access for up to approximately $5.6 million in new funding being provided by Biovest's senior secured lenders. The plan also proposes approximately $44 million of Biovest's senior secured debt, which includes the new funding, would be converted into common stock, thereby eliminating the company's senior secured debt upon exit from bankruptcy.
Biovest's largest senior secured lenders have indicated support for the plan, and the company expects to complete the restructuring and emerge from Chapter 11 by mid-2013.