Rescue plan for failed biotech company
A recapitalization plan for failed Queensland biotech Medigard has emerged a year after COVID-19 torpedoed the ASX-listed company's fundraising efforts.
The Gold Coast-based company, which listed on the stock exchange in 2004, had developed a retractable syringe that was licensed to a Chinese manufacturer. But while the syringe experienced some success in international markets, sales were well below expectations.
In the three years prior to its collapse, the company had been exploring new medical injectable developments including a treatment for degenerative disc disease.
Liquidator Michael Dullaway, of Pearce & Heers, said negotiations with Sydney-based Canary Capital to fund the degenerative disc product had fallen through due to poor market sentiment following the outbreak of the COVID-19 pandemic.
Medigard's shares have been suspended since March 2019 following which the company sought to raise more capital in order to recommence trading.
Mr Dullaway has told creditors that a confidential proposal to recapitalise the company had been received that would see creditors, who are owed an estimated $371,000, partially paid back. A meeting of creditors is scheduled for Friday to consider the proposal from the investor, who is believed to want the company as a "listing vehicle" for another venture rather than Medigard's original medical device business.
Medigard's financial problems had been brewing for some time. In the 2019-20 financial year it recorded a $264,000 net income following a $854,000 loss in the prior period.
A financial report lodged last year raised questions about the company's ability to continue as a going concern.
Medigard's financial strife is in contrast to recent successes by fellow Queensland biotechs Ellume and AnteoTech, which have both developed rapid tests for COVID-19.
AnteoTech said this week it had received European CE mark registration for the test that can detect the virus within 15 minutes and process up to 60 patients an hour.
Ellume won a $US235m contract with the US Department of Defence in February for the manufacture and distribution of its rapid COVID-19 test across the armed forces.
Originally published as Rescue plan for failed Qld biotech