[Just filed. Developing story.] March 27, 2023 – Publicly traded Codiak BioSciences, Inc. and one affiliated debtor (Nasdaq: CDAK; “Codiak” or the “Debtors”) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case No. 23-10350 (Judge TBA). The Debtors, a Cambridge, Massachusetts-based "clinical-stage biopharmaceutical company focused on pioneering the development of exosome-based therapeutics," are represented by Ryan M. Bartley of Young Conaway Stargatt & Taylor, LLP. Further Board authorized appointments include: (i) Province, LLC as financial advisor and to provide a CRO and additional support personnel and (ii) Stretto as claims agent.
The Debtors’ lead petition notes between 100 and 200 creditors; estimated assets between $100.0mn and $500.0mn ($106.2mn as at February 28, 2023); and estimated liabilities between $50.0mn and $100.0mn ($85.4mn as at February 28, 2023). Documents filed with the Court list the Debtors’ three largest unsecured creditors as (i) Lonza Houston, Inc. ($978k trade debt claim), (ii) PPD Development, LP ($178k trade debt claim) and (iii) Apex Systems, LLC ($65k professional services claim).
In its November 3, 2022 10-Q, Codiak which netted $74.4mn in an October 2020 IPO and has otherwise "incurred significant operating losses and negative cash flows from operations since inception noted that there was "substantial doubt about its ability to continue as a going concern [and that] its cash and cash equivalents of $51.8 million as of September 30, 2022 will be insufficient to allow the Company to fund its current operating plan through at least the next 12 months…"
In a press release announcing the filing, the Debtors note that they "will seek to pursue a sale process for its assets which is intended to maximize the value of the Company." The press release continues: "The Company began a marketing process ahead of the Chapter 11 filing to determine the level of market interest and is in ongoing discussions with several parties. The Company expects to consummate a sale of the entire business or its core assets as soon as reasonably practicable.
Douglas E. Williams, the Debtors' President and Chief Executive Officer, added: “The Board and management team have thoroughly assessed all of our strategic options and believe that this structured process represents the best possible solution for Codiak, taking into account our financial needs and the stage of our clinical and research programs."
The Debtors, who have not filed an 8-K over the last 120 days and did not otherwise provide an update as to their liquidity issues in the period between filing their last 10-Q and the above filing date press release, are similarly frugal in the guidance provided in their lead petition. Notwithstanding the announced intention to begin a sale process, March 26th board minutes filed with the lead petition do not note the engagement of an investment banker (there is no specific mention of a sale process at all) and do not provide any clues as to marketing in respect of assets or DIP financing.
Prepetition Shareholders
- ARCH Venture Funds – 24.02%
- Fidelity – 15.43%
- Flagship Venture Funds – 14.12%
- Armistice Capital, LLC – 7.23%
- Laurion Capital Management LP – 5.46%
About the Debtors
According to the Debtors: Codiak is a clinical-stage biopharmaceutical company pioneering the development of exosome-based therapeutics, a new class of medicines with the potential to transform the treatment of a wide spectrum of diseases with high unmet medical need. By leveraging the biology of exosomes as natural intercellular transfer mechanisms, Codiak has developed its proprietary engEx® Platform to expand upon the innate properties of exosomes to design, engineer and manufacture novel exosome therapeutic candidates. Codiak has utilized its engEx® Platform to generate a pipeline of engineered exosomes aimed at treating a broad range of disease areas, spanning oncology, infectious disease and rare disease.
Read more Bankruptcy News
The post Codiak BioSciences, Inc. – Clinical Stage Cambridge, Mass Biopharmaceutical Files for Bankruptcy with $85mn of Liabilities; Intends to Pursue Asset Sale appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.