Biovest Gets $7M Loan, Will Expand MN Work Force
Institutional investors have agreed to loan $7 million to Biovest International, Inc., so that it can emerge from bankruptcy and expand efforts to develop a cancer treatment at its Minnesota manufacturing facility.
Tampa, Florida-based Biovest-which has its manufacturing facility in Coon Rapids-has issued convertible debtor-in-possession term notes and common stock purchase warrants to those investors in exchange for the funding.
A bankruptcy court judge approved the transaction on Monday.
Biovest plans to use the proceeds from the debtor-in-possession notes “to fund its obligations upon emergence from reorganization and to support its ongoing business strategy consistent with its plan of reorganization.”
That includes development, regulatory, commercial, and partnering strategies for the company's BiovaxID-an immunotherapy being developed to treat non-Hodgkin's lymphoma-and for its line of hollow-fiber bioreactor instruments.
Douglas Calder, Biovest's director of investor relations and public relations, told Twin Cities Business on Tuesday morning that the company will soon expand its 25-employee Minnesota work force in conjunction with an announcement about the Coon Rapids facility becoming the company's “worldwide manufacturing hub” for BiovaxID.
“I would expect a substantial growth in terms of employees,” Calder said, adding that the company will announce details about that growth within the next 30 to 60 days.
Biovest-a 33-employee subsidiary of Accentia Biopharmaceuticals, Inc.-filed for Chapter 11 bankruptcy protection on November 10, 2008.
“We greatly appreciate the vote of confidence being demonstrated by the institutional investors participating in our financing,” Biovest President and General Counsel Samuel S. Duffey said in a statement. “This financing is the final prerequisite needed for Biovest to exit from Chapter 11 reorganization. We can now demonstrate to the court that Biovest has the financial strength to implement its plan of reorganization and to move forward to execute its business plan while striving to build significant stockholder value.”
The company's 35,000-square-foot manufacturing facility is located at 8500 Evergreen Boulevard in Coon Rapids. There, Biovest manufactures protein-based therapeutic products on a contract basis; a line of bioreactor instruments for pharmaceutical, biotechnology, and research organizations-including universities and cancer institutes; and BiovaxID.