Another major healthcare company files Chapter 11 bankruptcy

The rate of biotechnology company bankruptcy filings has been rising over the last two years with firms continuing to file petitions in 2025.

Annual bankruptcy filings had been fewer than 10 each year from 2011 through 2022, but began increasing in 2023 with 14 filings and 13 filings in 2024. Filings in 2023 were the highest since 2010, when 14 biotech firms filed that year as well.

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Among the biotech firms to file for bankruptcy last year were Acorda Therapeutics, the Pearl River, N.Y., maker of Parkinson’s disease and multiple-sclerosis therapies, which filed for Chapter 11 protection on April 1, 2024.

Related: Another major health care company files for Chapter 11 bankruptcy

Gamida Cell Inc., which develops stem cell treatments for several blood cancers and other disorders that include leukemia and lymphoma, on May 13, 2024, filed a prepackaged Chapter 11 bankruptcy

Companies filing for Chapter 11 in 2025 include Omega Therapeutics, which filed its petition on Feb. 10, 2025, with a restructuring support agreement that called for its parent affiliate Pioneering Medicines 08-B to be the stalking-horse bidder with a credit bid of $9.92 million in debtor-in-possession financing, a roll-up of about $1.5 million in prepetition debt, assumed liabilities, and cure amounts.

Austin, Texas-based biotechnology company Molecular Templates Inc., which develops cancer treatment drugs, filed for Chapter 11 bankruptcy on April 20, 2025, with plans to hand its assets over to its secured lender as part of a restructuring support agreement.

Synthego files for Chapter 11 bankruptcy

Finally, distressed biotechnology company Synthego Corp. filed for Chapter 11 bankruptcy protection on May 5, seeking to sell its assets to its prepetition lender.

Related: Major healthcare provider files Chapter 11 bankruptcy

The debtor listed $50 million to $100 million in assets and $100 million to $500 million in liabilities, including $73.4 million in secured debt owed to its prepetition lender Perceptive Credit Holdings III L.P.

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The debtor’s largest unsecured creditors include Wellington Hadley Harbor Master Investors, owed $51 million; 8VC Co-Invest Fund I, owed $37.1 million; and 8VC Fund I LP, owed $15 million.

The debtor had rapid revenue growth from sales of its cutting-edge gene editing tools and solutions to major research and biopharmaceutical companies around the world from 2020-2023, according to a declaration by the debtor’s Chief Restructuring Officer Allen Soong.

Revenue growth was outpaced by the cost and investment required to support the continued advancement of its technologies, which led to declining margins and growing operating losses.

The company raised capital to continue its operations, but by the end of 2023, the company was not generating positive cash flow and its interest burden rose more than 10 times its size in 2020-2021.

In spring 2024, the company sold its engineered cell business, which reduced its operating losses by one-third, but by February 2025, it wasn’t able to generate sufficient revenue to service its debt.

The company determined that filing for Chapter 11 protection was its best option for maintaining its enterprise value, protect business operations, and to organize a sale of the company.

The debtor filed a motion to obtain up to $50 million in debtor-in-possession financing from Perceptive that includes a $37.5 million roll-up of prepetition debt, $12.5 million in new money with $5 million funded on interim order.

Synthego won interim approval of the DIP loan on May 9.

Synthego seeks to sell its assets

The debtor is also seeking approval to sell the company to Perceptive in a bankruptcy sale with a stalking-horse bid calling for a credit bid of $74.4 million of debt owed to it, as well as the $12.5 million DIP.

The stalking horse also receives bid protections requiring a termination fee of 1.5% of the credit bid, up to $1 million in expense reimbursement, and a $500,000 overbid.

The San Mateo, Calif.-based debtor, which was established in 2012, manufactures genetic products, such as guide RNAs, to sell to biopharmaceutical companies for the development of pharmaceuticals and to research and academic institutions. It operates a manufacturing facility in Redwood City, Calif.

Synthego’s customer base consists of 25% pharmaceutical and biotechnology companies, 50% small- and medium-sized biotechnology companies, and 25% academic medical centers.

Related: Major healthcare company files for Chapter 7 liquidation

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