Mon, 27 Jun 2022 | ADMINISTRATION
Listed pharmaceutical firm 4D Pharma Plc has fallen into administration after a failed fundraising, in the wake of which its secured lender demanded the repayment of outstanding loans. James Clark and David Pike of Interpath Advisory have been appointed as joint administrators to the company and will seek a buyer.
The business, which is listed on both NASDAQ and AIM, develops live biotherapeutics, an emerging sub-sector of life sciences involving biological products containing a live organism that can be used in the prevention, treatment or cure of disease.
4D Pharma has several subsidiaries which are not currently affected by the administration process. It is based in Leeds and operates facilities in Ireland, Scotland, Spain and the US. Currently, the firm has six clinical programmes underway, including trials focusing on Parkinson’s Disease, cancer and asthma.
Over recent months, the company has been looking at options to secure further funding to finance its future growth. However, challenging market conditions prevented the company’s fundraising efforts from proceeding quickly enough.
The business made its secured lender, Oxford Finance, aware of this and opened discussions regarding a potential funding alternative. However, the company says that Oxford demanded immediate repayments of its outstanding loans, which total around £11.3 million including interest and associated fees.
In a statement, 4D Pharma said: “The company is not able to make that immediate repayment from its existing cash resources. With no immediate certainty of how that repayment could be made, the board requested that trading in the ordinary shares be immediately suspended pending clarification of the company’s financial position.”
“Subsequent to the suspension, the board was informed that Oxford had today instructed that the company be placed into administration, in accordance with the terms of the facility. Accordingly, James Clark and David Pike of Interpath Advisory have been appointed as joint administrators.”
“The board intends to work with the joint administrators on proposals to rescue the company as a going concern, albeit there can be no guarantee that this will be successful.”
Joint administrator and Interpath Managing Director James Clark added: "Since its inception, 4D Pharma has been at the forefront of innovation around the development and use of live biotherapeutic products, but unfortunately has been impacted by the growing uncertainty gripping the capital markets.”
"Our intention is to try to stabilise the company in the immediate term whilst we assess options for the business. We would encourage any parties interested in acquiring the business to contact us at the earliest opportunity. At this stage, 4D Pharma plc's subsidiaries remain outside of an insolvency process and continue to trade."
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