Funds from its sale of a research branch to Merck helped the Aiea firm rebound
POSTED: 1:30 a.m. HST, Jun 21, 2011
Hawaii Biotech Inc. has emerged from Chapter 11 bankruptcy nearly a year after it sold its dengue fever vaccine research unit to pharmaceutical giant Merck & Co.
The privately held biotech company, which develops vaccines for infectious diseases, filed for reorganization in December 2009 after a shareholder dispute blocked venture capital financing.
U.S. Bankruptcy Judge Robert Faris confirmed Monday the company’s reorganization plan and the close of bankruptcy proceedings.
“This is a significant milestone and an important day for Hawaii Biotech,” said Elliot Parks, chief executive officer. “We worked closely with our creditors and shareholders to accomplish this goal and appreciate their cooperation and understanding.”
Through the bankruptcy, Hawaii Biotech continued research at its Aiea facility and is focused on developing a tick-borne encephalitis virus vaccine with a grant from the National Institute of Allergy and Infectious Diseases.
It also is developing a malaria vaccine with academic researchers at the University of Hawaii at Manoa and plans to pursue pre-clinical and clinical development for these vaccines.
“Substantial shareholder value was preserved through the (bankruptcy) process,” said investor Rob Robinson, a member of the company's board of directors. “Hawaii Biotech is now in the position to move ahead and attract additional funding from grant and other sources unavailable during Chapter 11 reorganization.”
Merck bought Hawaii Biotech’s dengue fever vaccine research unit in July 2010, infusing the local tech firm with funding that was critical for it to emerge from bankruptcy.
Hawaii Biotech had been on track to exhaust a $2 million line of credit by the end of July. The Aiea-based company spun off its nonvaccine businesses in 2006 into Cardax Pharmaceuticals Inc.