Diehard cancer vaccine developer files for bankruptcy with plans to emerge
Biovest International sees a sunnier financial picture for its cancer vaccine hunt, but first that means filing for Chapter 11 and rejiggering its balance sheet. In a second trip to the bankruptcy court, the Tampa-based outfit seeks approval of a plan to nix debt and bring in $5.6 million in new funding.
The $5.6 million sounds like short money in the megabucks biotech game, but that amount is almost as much as the Pink Sheets-listed company's market value of $5.9 million as of late Friday morning, according to Google Finance.
Cancer vaccines have lost their luster among some investors in the ugly aftermath of Dendreon's ($DNDN) woes in marketing its pioneering prostate cancer product Provenge. Nevertheless, Biovest has plodded along with a penny-stock share price for a while and even during this latest journey into bankruptcy aims to advance efforts to gain approval of its BiovaxID candidate in the European Union and Canada for combating follicular non-Hodgkin's lymphoma. Yet those applications haven't been filed yet.
Biovest is pitching a restructuring plan that involves eliminating $44 million in secured debt from Laurus/Valens Funds and Corp Real, while tapping secured lenders for the $5.6 million. The idea is to convert the $44 million, including the new funding, into common stock. The outfit wants to emerge from Chapter 11 in mid-2013 as it did back in 2010 from a previous exit from bankruptcy.
We'll see whether the bankruptcy court in Florida goes for the proposal.