It's Officially the End of the Road for Massachusetts Biotech Nuclea Biotechnologies
April 19, 2017
By Mark Terry, BioSpace.com Breaking News Staff
New York-based NanoMolecular DX has acquired the intellectual property of Massachusetts-based Nuclea Biotechnologies for $330,000.
The deal was signed March 29 and follows the failure of Nuclea’s assets to sell at auction in January. On August 30, 2016, Nuclea filed a voluntary Chapter 7 petition in U.S. Bankruptcy Court for the District of Delaware. At that time, Nuclea had $235,144 in assets and $9.6 million in debts.
In 2013, Nuclea acquired a blood-based diagnostic test for HER2/neu for women with metastatic breast cancer that overexpresses the HER2/neu protein. It did so when it acquired a subsidiary of Wilex AG, Wilex Inc. In that deal, Nuclea acquired all of Wilex Inc.’s assets, including the assay and additional assays for carbonic anhydrase IX (CAIX). Nuclea also took on a $2.5 million loan between Wilex Inc. and Wilex AG, as well as single-digit royalty payments to Wilex AG on net sales of the HER2/neu and CAIX assays.
Nuclea’s largest creditor, according to the company’s bankruptcy filing, was Wilex AG. Nuclea owed the company $2.7 million. Per GenomeWeb, “In October, Wilex AG filed a motion seeking transfer of Nuclea’s bankruptcy case to Massachusetts Bankruptcy Court and indicated that it might pursue additional actions, including investigation of members of Nuclea’s former management team and attempting to obtain payment from Nuclea spin-out, NanoDX, which launched last year with Muraca as president.”
Patrick Muraca heads NanoMolecular DX, and is the former founder and chief executive officer of Nuclea Biotechnologies.
Muraca has said that NanoDX closed quickly after it is launch when Nuclea did not raise necessary funding. It was part of New York State’s START-UP NY incubator program. Muraca indicated that NanoMolecular DX was completely separate from Nuclea and NanoDX. NanoMolecular DX has raised approximately $1 million from 16 investors to fund the Nuclea assets and other operations. He says he hopes to raise another $3 5o $5 million over the next year.
NanoMolecular DX is headquartered in Lee, Mass., and rents laboratory facilities at SUNY Poly in Albany, New York.
The asset sale was managed by San Diego’s Heritage Global Partners in partnership with Devonshire Holdings. The sale was performed via a Chapter 11 process under Section 363.
Heritage stated, “Devonshire Holdings retained HGP to help secure additional parties interested in purchasing Nuclea’s licensing, patents and materials for Human Epidermal Growth Factor Receptor 2 (HER2), Epidermal Growth Factor Receptor (EGFr) and other valuable assays. HGP leveraged its deep industry expertise and relationships to conduct a rigorous marketing process that resulted in competing offers from multiple strategic buyers, and ultimately the successful sale of the Nuclea IP assets.”
Nuclea was founded in 2005 and was focused on mass spectrometry testing for clinical diagnostics In Vitro Diagnostic (IVD) and Research Use Only (RUO) assays for prostate and breast cancer, diabetes and other metabolic syndromes within oncology and endocrinology.
About nine months after Muraca was replaced by Nuclea’s board of directors, Nuclea filed for Chapter 7 bankruptcy. He was replaced by Donald Pogorzelski, who stayed with the company only one month. Muraca claims that leaving the company was a “mutual decision” between him and the board based on the belief that Pogorzelski would be better at moving Nuclea from a research-and-development company to a commercial company.
Muraca told the Berkshire Eagle that he didn’t know what happened to Nuclea after he left. “That’s a good question,” he said. “When I walked out the door, Nuclea was poised for commercialization. They brought in a fantastic CEO and he was poised and ready to go. I can’t speak to the specific reasons because I was out of the company at that time.”
Nuclear had 197 creditors, including the Pittsfield Economic Development Authority, the city of Pittsfield, Berkshire Medical Center, and many others. But the largest creditor was Wilex AG.
In court documents, Wilex stated, “there have been allegations of, at a minimum, negligence and or possible improprieties, and fraudulent transfer of assets, by or to the former CEOs and other officers of the debtor.”