Neurologix Inc Announces Bankruptcy
(Edit this deal
PRESS RELEASE - Neurologix Inc Enters Bankruptcy
Neurologix Inc., a developer of gene therapy technology for people suffering from brain diseases, recently filed for bankruptcy protection to resolve its untenable debt situation, according to a report from Bloomberg Businessweek.
Sources say that Neurologix, which is based in Fort Lee, New Jersey, told the bankruptcy court that it was struggling under the weight of nearly $13 million in various debts. The company found itself unable to repay its debts thanks to plummeting assets, as the company reported that it only has $1.2 million worth of cash and property.
Interestingly, the company opted for Chapter 7 bankruptcy, which will allow it to liquidate most of its assets in order to meet its obligations to creditors. Companies looking to maintain their property, or resolve their debt through other means, typically file for Chapter 11 bankruptcy protection instead.
The news of the company’s Chapter 7 filing will likely be discouraging for the thousands of patients who stood to potentially reap the benefits of the company’s ground-breaking gene therapy technology.
Sources indicate that Neurologic was devoted to creating gene transfer therapies for patients who suffered from a wide range of diseases. The company claims on its website that it is "a clinical-stage biotechnology company dedicated to the discovery, development, and commercialization of life-altering gene transfer therapies" for disorders of the brain and central nervous system.
Currently, according to its website, the company is developing gene transfer therapies for people suffering from Huntington’s disease, epilepsy, depression, and Parkinson’s disease.
But despite its expertise in cutting-edge gene therapy technology, the company appeared to have some managerial troubles at the top. Sources say that the company hired a consultant in February after its chief executive officer abruptly resigned.
The company is owned by several different investors, although the largest individual stakes are owned by Corriente Advisors LLC, which owns 23 percent of Neurologix, and General Electric Pension Trust, which owns 20 percent of the struggling company.
The company’s filing is not unusual for companies working at the margins of medical technology. Investing in new technology, particularly in the medical field, can be a very expensive and very risky venture.