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Epix Pharmaceuticals Inc. has announced it will quietly wind down operations after a hard fought battle to keep the company afloat.
The Lexington-based company’s officials said that the company was unable to raise enough money or enter into a partnership in time and that it has entered into an Assignment for the Benefit of Creditors. The purpose of the Assignment is to conclude the company’s operations and provide for an orderly liquidation of its assets.
Elkan Gamzu, president and CEO of EPIX, stated, “It is with great disappointment that the company must proceed with this decision. Over the past several months we had taken several actions in an effort to improve the financial health of EPIX, including the retirement of our $100 million aggregate principle amount of 3 percent convertible senior notes due 2024. Despite this and the efforts of our financial advisors who approached numerous third parties over the past several months, we were unable to obtain additional funding to continue our operations or consummate a strategic transaction.”
In April, EPIX announced the sale of the U.S., Australian and Canadian rights of its vascular imaging agent Vasovist to Lantheus Medical Imaging Inc. for $28 million. The biotechnology company targeted $10.5 million of the proceeds to pay off debts to a former partner, Germany-based Bayer Schering Pharma. That same day, Epix also announced a deal to wipe out $100 million of debt by offering bondholders shares of the company and cash payments.
But these moves were not enough to prevent the company from being delisted by the Nasdaq on May 14. The delisting followed repeated warning letters that the company failed to meet the minimum requirements of the stock exchange, including failure to maintain a $35 million market capitalization for 10 consecutive trading days.
Signs of the company’s troubles were evident from the end of 2008, when the company had $24.6 million in cash on hand. Epix burned through $36.45 million last year. The company received a going-concern letter — a red flag that a company may not survive another full year — from its auditor Ernst and Young, as part of its year-end earnings statement.
The company has named Joseph F. Finn, Jr., of Finn, Warnke & Gayton in Wellesley Hills as the assignee designated to dispose of the company’s assets. After paying off the company’s creditors, Epix does not expect that there will be any proceeds for distribution to the company’s stockholders.
Epix has laid off all of its employees. CEO Elkan Gamzu will stay on for a short period of time to assist in the liquidation.
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