Accentia Biopharmaceuticals, Inc. (Pink Sheets:ABPI) today announced
that the Company and its subsidiaries have filed voluntary petitions for
reorganization. With existing cash flows from subsidiaries and the
potential for relatively near-term significant business development
opportunities, this action is intended to provide an opportunity for the
Company to restore shareholder value and to pay secured and unsecured
creditors. Under protection of the court, Accentia plans to implement a
series of initiatives designed to significantly decrease operating
expenses and financing costs, and focus cash and resources on drug
development and other priority programs that will allow the Company to
attract key funding/partnering opportunities. Affiliates of the Company,
including Hopkins Capital Group, LLC, a major shareholder, have
indicated a willingness to provide additional financing to the Company
as part of its reorganization plan. A conference call and webcast is
scheduled for 4:30 p.m. (EST) this afternoon to further discuss this
action.
In deciding to seek reorganization, the Company considered, among other
things, its limited access to additional financing which has been
negatively impacted by the crises in the world-wide debt and equity
markets. Accentia believes that the recent precipitous decline in its
stock price is a result of the global equity market crisis, including
selling pressure created by forced redemptions by hedge funds. Limited
access to the capital markets appears to be a systemic condition within
the biotech markets, as according to the Biotechnology Industry
Organization (BIO), 38% of 370 U.S. small biotech companies are
operating with less than a year’s worth of
cash, and nearly 100 publicly-traded biotech companies have less than
6-months’ cash.
After evaluating alternatives, Accentia determined that reorganization
is the best option at this time, enabling the Company to remain focused
on the commercialization of its drug portfolio, which consists of novel
products and technologies that target multiple billion-dollar market
opportunities, including therapies for the treatment of many kinds of
blood cancers and autoimmune diseases such as multiple sclerosis.
During this reorganization process, the Company expects to continue
operations without interruption, while striving to maximize long-term
shareholder value. The Company also stressed its intent to ultimately
pay all of its secured and unsecured creditors in full.
Accentia’s Chief Financial Officer, Alan M.
Pearce, stated, “Our Board of Directors
determined that reorganization is in the best long-term interest of
Accentia and its subsidiaries, employees, shareholders and creditors, as
well as the many thousands of patients that we expect will benefit from
our drugs and technologies.
