After 25 years and at least $193 million invested in trying to launch a sustainable biotech company, Viragen has thrown in the towel.
The Plantation-based company (OTCBB: VRAIE) and subsidiary Viragen International (OTCBB: VGNI) filed an assignment for the benefit of creditors in Broward County Circuit Court on Tuesday. Fort Lauderdale-based accountant Soneet R. Kapila was assigned to liquidate the company's assets.
On Oct. 16, its Scottish subsidiary filed a petition to wind down its business and liquidate its assets in a Glasgow, Scotland, court. Its Swedish subsidiary, ViraNative AB, filed an application for protection under the bankruptcy laws of Sweden on Sept. 17.
The closing of Viragen comes after decades of trying to introduce a breakthrough drug that led to constant losses. It's a reminder of the pitfalls of the biotech industry Florida is working hard to develop.
For years, the company put out press releases about manufacturing drugs in eggs laid by transgenic hens at Scotland's Roslin Institute - the same place that cloned Dolly the sheep. Viragen released pictures of green chickens to show that it could pass down altered genetic traits that could be useful in drug production. Low on cash and with no revenue potential in sight, Viragen canceled its agreement to fund the work at Roslin on June 21.
The company's only approved drug is Multiferon, which is a first-line treatment for malignant melanoma in Sweden and a second-line treatment for the disease in Mexico, Indonesia, Hong Kong, Myanmar, Bulgaria, Egypt Thailand and South Africa.
It was not able to get approval for the drug in the United States or Europe. The company also studied using Multiferon for severe acute respiratory syndrome (SARS) and avian flu - often issuing press releases in the middle of intense media coverage of these diseases - but nothing tangible came out of it.
In the nine months ending March 31, the last financial results available for Viragen, it sold $299,249 in Multiferon for its only revenue. It had a net loss of $27.6 million during that time.
In that filing, Viragen listed assets of $7.6 million verses an accumulated deficit of $193.8 million. The company made a $3 million private placement since that filing.
Shares of Viragen remained unchanged at 1 cent in afternoon trading.
The stock has declined sharply in recent years - falling from $3.70 on Sept. 9, 2003, to 87 cents on June 6, 2005, and 51 cents on May 31, 2006. In June 2006, the Motley Fool Web site rated Viragen one of the 10 worst performing stocks of the past 10 years, with a negative return of 99.3 percent.
