Date: Dec 08, 2006 Source: bizjournals (
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Therion Biologics Corp. has ceased operations and is liquidating its assets under Chapter 7 bankruptcy protection, five months after disclosing that clinical trials of its two lead cancer drugs yielded lackluster results.
The Cambridge company, which once employed about 100 people, filed for bankruptcy protection on Nov. 21 in U.S. Bankruptcy Court in Delaware.
"The bankruptcy was clearly due to the failure of the trials," said Dennis L. Panicali, who had served as Therion's CEO until 2002 when he became its chief scientific officer, a position he said he held until August when he and about 30 others were let go as part of a progressive restructuring. He confirmed the 15-year-old company has closed its doors.
Not surprisingly, Therion's liabilities far outweigh its reported assets. The company owes creditors just shy of $24 million, it revealed in a court filing, with secured claims totaling more $20.53 million and unsecured claims totaling $3.47 million.
The company ran out of cash after its main investor and former company director Hans-Werner Hector cut off a $50 million line of credit he had granted the company, following reports in June that the company's Phase 3 trial of a pancreatic cancer treatment and a Phase 2 trial of its treatment for prostate cancer had both ended in failure, according to Panicali.
Therion had been paying expenses with drawdowns from the credit line, granted by Hector in December 2005, Panicali said.
Bankruptcy records show that Therion valued its assets at just $215,880, but the filings don't include an estimated value of the company's intellectual property, office equipment or other supplies.
Kranich Vermogens-und Beteiligungsverwaltungs GmbH, which Panicali described as a German corporate vehicle used by Hector to invest in Therion, has a secured claim of $20.5 million. That claim amount matches the sum the company had borrowed from its line of credit, the former chief scientific officer said.
Lansky Consulting LLC, a Burlington, Vt. statistical-analysis firm, held the only other secured claim, in the amount of $34,595, court records show.
Current Therion CEO Michael Wyand could not be reached for comment. Mark Leuchtenberger, Therion's CEO from 2002 until September, left the company to become CEO of Targanta Therapeutics Corp. in Cambridge.
There are 155 unsecured claims documented in the bankruptcy filing. The three largest unsecured claims listed are $1.6 million from Orion Clinical Services in Princeton, N.J.; $434,573 from PPD Development, of Wilmington, N.C.; and $185,678 from BioReliance in Rockville, Md.
Former employees are among local creditors with unsecured claims, including Panicali, who says he is owed $172,764 due to a breach of his employment agreement. Other local creditors include Boston law firm Nixon Peabody LLP, which claims it is owed $67,069; and Brigham and Women's Hospital in Boston, which claims it is owed $31,687.
Douglas B. Rosner, co-chairman of the Boston Bar Association's bankruptcy division and an attorney with Boston law firm Goulston & Storrs, said there may be more claims in Therion's bankruptcy from creditors that had not sent invoices to the company prior to the Chapter 7 filing.
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The trustee for the liquidation, Jeoffrey L. Burtch, an attorney at law firm Cooch & Taylor in Wilmington, Del., did not return calls or e-mail messages for comment. Donna L. Harris, the Delaware debtor's attorney listed in the filing also did not return requests for comment.
