Ailing Antex files for Chapter 11 after sale to BioPort unravels

Biotech is unable to meet deal's 2 key requirements

March 28, 2003|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

Antex Biologics Inc., a cash-starved Gaithersburg biopharmaceutical company, said yesterday that a deal to sell itself to a Michigan vaccine maker had unraveled, forcing it to file for Chapter 11 bankruptcy protection."

In a statement, Antex said it would still enter a sale agreement with the same company, BioPort Corp., while in bankruptcy proceedings. The sale would be subject to bankruptcy court approval and an auction process.

The company said it filed for Chapter 11 protection in Maryland.

Antex and BioPort officials could not be reached for comment yesterday.

Antex, which has vaccines under development but none on the market, announced a deal March 17 to sell its assets to BioPort for $3 million in cash or $3.6 million in cash and notes. BioPort makes anthrax vaccine.

As part of the deal, Antex secured a $1 million loan from BioPort to support its operations until the deal closed. To date, BioPort has advanced $300,000 to Antex, but has since ceased lending it more money, Antex said in a company statement.

The deal with BioPort was contingent on two conditions. Antex needed to obtain an agreement from preferred stockholders to exchange their shares for future royalties on two product candidates. It also needed an agreement from its creditors and note holders to settle current claims at significant discounts, according to Antex's statement yesterday.

Antex said that it was unable to reach agreement with its preferred stock holders and note holders, and it did not indicate whether an agreement had been reached with creditors. As a result, BioPort notified Antex that it would not proceed with the deal, Antex said.

But a sale of Antex's assets to BioPort could happen now that Antex is under bankruptcy protection. Sales proceeds would first satisfy the claims of creditors, and any remaining assets would go to the company's stockholders, Antex said.

To keep Antex operating, BioPort is seeking to provide certain post-petition "debtor-in-possession" financing to finance the company's operations until its reorganization is completed, Antex said.

Since Antex doesn't have marketable products, Antex has relied on equity financing and research and development alliances with other companies and the U.S. government to finance its operations. The company has about 38 employees.

Antex shares gained a penny to close at 12 cents on the American Stock Exchange.

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