Biovest seeks bankruptcy protection for restructuring
TAMPA, Fla. & MINNEAPOLIS—Biovest International Inc. has reported that it 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 while also providing as much as $5.6 million in new operating funding.
Subject to becoming effective, 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 says it "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." The company 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 will also continue to service its cell culture and instruments clients from its Minneapolis facility "without interruption."
Based on filings made to the bankruptcy court, Biovest will seek access for some $5.6 million in new funding being provided by Biovest's senior secured lenders. The plan also proposes that approximately $44 million of Biovest's senior secured debt, which includes the new funding, would be converted into common stock on the effective date of the plan, 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. The reorganization filing was made in the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, and Biovest's bankruptcy counsel is the law firm of Stichter, Riedel, Blain & Prosser P.A. All terms proposed in the plan, as well as in subsequent related filings, will be subject to acceptance by the bankruptcy court and will ultimately require final approval by the court in order to become effective.
SOURCE: Biovest news release