TAMPA, Fla. &MINNEAPOLIS—Biovest International Inc. has reported that it has filed a petition forprotection under Chapter 11 of the U.S. Bankruptcy Code and a Plan ofReorganization, seeking to implement a restructuring of itsbalance sheet that would eliminate approximately $44 million in seniorsecured debt while also providing as much as $5.6 million innew operating funding.
Subject to becoming effective, Biovestexpects the plan would significantly strengthen its balance sheet andsupport ongoing strategies to commercialize its BiovaxID personalizedcancer vaccine, including facilitating ongoing partnering/licensinginitiatives, as well as enhancing the opportunity to secure newcontracts establishing its hollow fiber bioreactors as a novel cellculture platform for viral vaccine production.
During this reorganization process, Biovest says it "plans to continue itsoperations without interruption, including advancing its regulatorystrategy seeking approvals for BiovaxID in the European Union and Canadafor the treatment of follicular non-Hodgkin's lymphoma." The companyplans to file these formal marketing applications following completionof its reorganization with regulatory decisions anticipated in 2014. Ifapproved, BiovaxID would be the first cancer vaccine available forlymphoma patients. Biovest will also continue to service its cellculture and instruments clients from its Minneapolis facility "withoutinterruption."
Based on filings made to the bankruptcy court, Biovest will seek accessfor some $5.6 million in new funding being provided byBiovest's senior secured lenders. The plan also proposes thatapproximately $44 million of Biovest's senior secured debt, whichincludes the new funding, would be converted into common stock on theeffective date of the plan, thereby eliminating the company's seniorsecured debt upon exit from bankruptcy.
Biovest's largest senior secured lenders have indicated support for the plan, and the company expects to complete the restructuring and emergefrom Chapter 11 by mid-2013. The reorganization filing was made in theU.S. Bankruptcy Court for the Middle District of Florida, TampaDivision, and Biovest's bankruptcy counsel is the law firm of Stichter,Riedel, Blain & Prosser P.A. All terms proposed in the plan, as well as in subsequent relatedfilings, will be subject to acceptance by the bankruptcy court and willultimately require final approval by the court in order tobecome effective.
SOURCE: Biovest news release