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Excessive ranges of debt obligations have led a number of biotechnology and pharmaceutical firms into monetary misery, requiring them to file for chapter and, in lots of circumstances, search gross sales of their belongings.
Debtors have typically run out of choices to acquire capital to refinance debt and can flip to their secured lenders to hunt an acquisition of their belongings.
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Biotechnology firm chapter filings have been rising during the last two years with companies persevering with to file petitions in 2025.
Related: Major health care company files for bankruptcy to sell assets
Biotech companies filed fewer than 10 bankruptcies annually from 2011 by way of 2022, however filings started rising in 2023 with 14 circumstances and one other 13 in 2024. Filings in 2023 have been the very best since 2010, when 14 biotech companies filed that 12 months as effectively.
Vital Chapter 11 filings in 2025 have included Omega Therapeutics, which filed its petition on Feb. 10, 2025, with a restructuring assist settlement that referred to as for its guardian affiliate Pioneering Medicines 08-B to be the stalking-horse bidder with a credit score bid of $9.92 million in debtor-in-possession financing, a roll-up of about $1.5 million in prepetition debt, assumed liabilities, and remedy quantities.
Biotech firms promote belongings to lenders
Additionally, Austin, Texas-based biotechnology firm Molecular Templates Inc., which develops most cancers therapy medication, filed for Chapter 11 chapter on April 20, 2025, with plans handy its belongings to its secured lender as a part of a restructuring assist settlement.
Distressed biotechnology firm Synthego Corp. filed for Chapter 11 chapter safety on Could 5, looking for to promote its belongings to its prepetition lender Perceptive Credit score Holdings III L.P. in a chapter sale with a stalking-horse bid calling for a credit score bid of $74.4 million of debt owed to the lender, in addition to a $12.5 million DIP financing.
Picture supply: Getty Photographs
AmplifyBio recordsdata for chapterÂ
Lastly, financially challenged biotechnology firm AmplifyBio, which develops next-generation vaccines, medication, and therapeutics, filed for Chapter 11 safety, looking for to promote all of its belongings and liquidate by way of the chapter course of.
Related: Another major health care company files for Chapter 11 bankruptcy
The West Jefferson, Ohio, debtor filed its petition within the U.S. Chapter Courtroom for the Southern District of Ohio, itemizing $100 million to $500 million in belongings and $50 million to $100 million in liabilities.
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AmplifyBio’s largest collectors embrace sure shareholders, together with Battelle Providers Co., owed $3.25 million; Battelle Memorial Institute, owed $1.89 million and Kavra 14 LLC, owed $1.8 million.
The debtor, which was spun out of Battelle Memorial Institute in 2021, confronted persistent monetary and operational challenges with excessive mounted and variable prices, in keeping with a declaration by Chief Restructuring Officer Kasey Rosado. The corporate reported annual internet losses of $26 million in 2022, $56 million in 2023, and $74 million in 2024.
AmplifyBio presently has about $3 million in money available and $30 million in unsecured debt obligations. In early February, the debtor defaulted on $28.07 million in debt owed to prepetition secured lender Hercules Capital Inc.
The corporate launched a evaluation of strategic alternate options and decided in April 2025 that its operations have been now not viable and terminated all of its workers. The corporate seeks to acquire $2.5 million in debtor-in-possession financing from Battell Memorial to fund the corporate by way of its sale course of in chapter.
Related: Another major healthcare company files Chapter 11 bankruptcy