Unable to consummate a merger with Elitech of France that was announced last year, San Diego’s Nanogen says it has filed for Chapter 11 bankruptcy and plans instead to sell its assets to Elitech for $25.7 million.
Nanogen, which specializes in molecular diagnostics kits and reagents for rapid, point-of-care, diagnostic tests, revealed its merger plans with Paris-based Elitech last August. The deal was structured as a reverse merger, allowing shares of Elitech, which sells chemistry and microbiology-based diagnostics, to be traded on the Nasdaq exchange.
But in January, the companies said they were exploring alternatives to the merger. Nanotech and Elitech explained that market conditions had made it unlikely they would be able to secure needed working capital financing by March 31, which was among the terms set in the merger agreement.
In a statement yesterday, Nanogen says “despite extensive and thorough efforts” by the company and its advisors, Nanogen was unable to secure sufficient working capital to service its debt and fund its operations. Nanogen says it will not have sufficient proceeds from its packaged bankruptcy deal to permit distributions of cash or other property to shareholders, unless it can sell its assets through a court-supervised bankruptcy auction for significantly more than $25.7 million.
Nanogen said it plans to continue to operate under the bankruptcy court’s supervision until its asset sale is completed. The biotech was founded in 1993 by Howard Birndorf, a prominent figure in San Diego’s biotech industry.
