Unilife Corp., a King of Prussia- and York-based company which is developing "wearable injectors" to deliver drugs to patients for pharmaceutical firms including Amgen, has filed for Chapter 11 federal bankruptcy restructuring in Delaware.
"Operations will remain ongoing" as the company seeks either a fiscal settlement with its creditors, or a buyer, Unilife said in a statement.
OrbiMed Advisors, a New York investment firm, has offered $7 million "debtor-in-posession" financing package to keep the company running for the next two months, until June.
Unilife employs around 80, down from 160 last year following layoffs in early April, and 278 -- almost half of whom worked in R&D -- in mid-2015.
The filing follows months of review with Unilife advisers, including turnaround specialist SSG Advisors, of West Conshohocken, in which creditors, including OrbiMed and Amgen, failed to reach agreement about raising capital from new investors.
Shares of the Nasdaq-listed company, whose major owners include clients of JPMorgan and Vanguard Group, fell below 20 cents on the news today. The shares had been slipping toward penny-stock levels in recent months.
Shares peaked at $179 in February 2010, shortly after the company began trading at $100, and were still in the high $50s in early 2014. Unilife reported sales of a little more than $1 million a month in the last fiscal year, but has been burning a net $3 million to $6 million a month in expenses.
"Chapter 11 is the best path forward at this time," Unilife chief executive John Ryan said in a statement.
Ryan, a former partner at Philadelphia's Duane Morris LLP law firm and ex-lawyer at Aramark Corp., became Unilife's acting CEO a year ago as founder Alan Dennis Shortall left the company.
Ryan added that either "restructuring Unilife's balance sheet, or the sale of its assets as a going concern through the Chapter 11 process, will best position Unilife's business for future success."
Unilife listed assets of $83 million and debts of $201 million in its bankruptcy filing.
Unsecured creditors listed in Unilife's bankruptcy filing include drugmaker Sanofi Winthrop Industrie of France, which says it is owed $10 million, and Kahle Automation, Morristown, N.J., which says it is owed $4.2 million. Unilife says it is contesting both claims.
Unilife also owes $4 million to Morgan Stanley, the investment bank; $2.75 million to Kikma Pharmaceuticals of Jordan; and $1.1 million to Meco Inc., Mandeville L.A.
The company also says Pennsylvania wants it to pay $300,000 in sales taxes, which it plans to dispute.
In his statement, Ryan wrote that "Unilife's current capital structure was put in place to support our business model as a diffuse drug delivery system company." But now, "in light of the terms of the company's debt obligations and its inability to continue to finance the business outside of bankruptcy, we need to restructure the company's debt and equity or sell the assets as a going concern."
Ryan also said he's "confident that our business can emerge from this process ready to focus on delivering for our customers and their patients" while "minimizing disruption."
Besides SSG, Unilife advisers include Philadelphia law firms Cozen O'Connor, as restructuring counsel, and Duane Morris, corporate counsel. Documents posted at http://www.omnimgt.com/unilife .