North Carolina's NephroGenex Files for Chapter 11 and Seeks Sale
May 2, 2016
By Alex Keown, BioSpace.com Breaking News Staff
RALEIGH, N.C. -- Shares of North Carolina-based NephroGenex, Inc. are down more than 60 percent this morning after the company announced today it filed for bankruptcy protection under Chapter 11 in the United States Bankruptcy Court for the District of Delaware.
In announcing bankruptcy, NephroGenex officials said the company intends to sell off its assets under guidance by the courts. The company retained investment banking firm Cassel Salpeter & Co., LLC as its financial advisor and to aid it in selling off its assets. NephroGenex said it filed a series of motions with the court in order to “ensure the continuation of normal operations during this process.” Normal operations include the timely payment of employee wages and salaries, as well as maintaining employee benefits.
NephroGenex, which is focused on the development of therapeutics to treat kidney disease, halted its clinical program for oral Pyridorin for the treatment of diabetic nephropathy in February. Pyridorin (pyhridoxamine dihydrochloride) was being evaluated in a Phase III study to treat diabetic nephropathy. As of December, NephroGenex was also evaluating intravenous formulations of Pyridorin for specific types of acute kidney injury.
Last month, the company disclosed in a filing with the U.S. Securities and Exchange Commission that it had terminated its chief executive officer, Pierre Legault, as well as its chief science officer, Jaikrisha Patel. Bankruptcy protection was the next stage as the company struggles to finance its operations.
“The Board and management team have conducted a rigorous assessment of all of our strategic alternatives and believe that this process represents the best possible solution for NephroGenex, taking into account our financial situation,” said Richard J. Markham, chairman of the board of NephroGenex. “We are committed to an outcome that maximizes value and believe that a bankruptcy sale process will enable us to meet that objective.”
When NephroGenex went public in 2014, it was hailed as a promising company with potential to have a strong impact on kidney disease treatment, however in 2015 the company continued to seek additional financing for its operations and research, which spooked investors and caused the stock to nosedive. Shares plunged to less than $1, which caused The Nasdaq Stock Market to put the company on notice and was headed toward being delisted.
With its cash woes, NephroGenex hired MTS Health Partners to explore options, including a reverse merger. A reverse merger is when a public company is bought by a private company, and bypasses the process of going public. In other news, shares of Bind Therapeutics are down more than 64 percent this morning after filed Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.