Biovest Exits Bankruptcy, Appoints New CEO
After filing for Chapter 11 bankruptcy protection in November 2008, Biovest International, Inc., said Monday that it formally completed its restructuring and recapitalization earlier this month.
According to U.S. Securities and Exchange Commission (SEC) filings, Tampa, Florida-based Biovest—which operates a 35,000-square-foot manufacturing facility in Coon Rapids—filed for bankruptcy protection as a result of “the disruption in the U.S. capital and finance markets which limited access to required funding.” In October 2010, the company sought a $7 million loan from institutional investors to aid its emergence from bankruptcy.
As a reorganized entity, Biovest eliminated approximately $48.5 million in debt by converting it into new shares of its common stock, which are being issued to creditors. Shares of common stock, warrants, and options that were established prior to Biovest’s reorganization plan have been cancelled and have ceased to trade, the company said.
Biovest also said that it promoted Carlos Santos to serve as its new CEO and to advance its BiovaxID treatment—an immunotherapy to guard lymphoma patients against cancer remission—from the clinical stage to the commercial market. Santos previously worked as the senior vice president of product development and regulatory affairs for Biovest.
Santos replaced former Biovest CEO Samuel Duffey, who will lead a new Biovest-owned subsidiary. According to documents filed with the SEC, the subsidiary will continue Biovest’s anti-viral and anti-cancer product development.
Biovest also named Illinois-based attorney Ronald Osman as its new chairman. Osman had been a director of the company since 2006. Eugene Grin, a principal and co-founder of New York-based hedge fund investment companies Laurus Capital Management, LLC, and Valens Capital Management, LLC, has been appointed to the company’s board of directors. The Laurus and Valens entities are Biovest shareholders.
The publicly traded company is a subsidiary of Tampa, Florida-based Accentia Biopharmaceuticals, Inc., and manufactures vaccines, which treat and prevent remission of B-cell non-Hodgkin’s lymphoma, a cancer of the immune system.
In February 2011, Biovest received loans from the state and the city of Coon Rapids to renovate its Minnesota facility. Mark Phillips—then-commissioner of the Minnesota Department of Employment and Economic Development—told Twin Cities Business at the time that, although the company only committed to adding 14 jobs within the next two years to what was then a 25-person local work force, the loan investment “could create hundreds of jobs” over time in bio-manufacturing, production, quality control, and engineering, among other areas.
Tuesday morning calls to a Biovest representative seeking information about the company's current work force were not immediately returned.
For the second quarter of Biovest’s 2013 fiscal year, which ended March 31, the company reported $815,000 in revenue—a 33 percent decrease from the same quarter in 2012.