The board of troubled Irish medtech business HiberGene Diagnostics has decided to call in the liquidator, citing the collapse of talks with potential funding sources as the main reason for the decision.
HiberGene Diagnostics and a related company, HiberGene Diagnostics Sales, both filed insolvency notices with the Companies Registration Office late last week, with a meeting of the insolvent company’s creditors slated for September 9th.
At that meeting, the directors will nominate accountant Colin Gaynor of Resolute Advisory as liquidator. However, it is understood that some shareholders may look to block his appointment and have an “independent” liquidator appointed in Mr Gaynor’s place.
The directors of the HiberGene Diagnostics are listed as Peter Kidney, with an address in Rathmines, Dublin 6; David Corr, Goatstown, Dublin 14; James Murray, Sandymount, Dublin 4; and Seamus Gorman, Dundrum, Dublin 14.
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Mr Kidney, Mr Corr and Mr Murray and Mr Gaynor have not responded to a request for comment.
A spokeswoman for Enterprise Ireland, an investor in the company, declined to comment, saying the State agency does not comment on individual companies for reasons of “client confidentiality”.
HiberGene Diagnostics, which was founded in 2009, brought its first product – a test for meningitis – to market in 2015. It has since developed, manufactured and sold 13 molecular tests to identify critical infectious diseases – including a rapid Cvid-19 test – sexually transmitted infections and hospital-acquired infections.
The company is understood to have raised more than €12 million in funding since it was established.
HiberGene’s board, which has been at loggerheads with a group of disgruntled investors in recent months, wrote to shareholders on August 26th, informing them of their intention to appoint a liquidator.
Blaming a group of shareholders for disclosing “confidential company business” to the Sunday Independent in recent weeks, the board told shareholders that a potential source of funding had walked away from negotiations in August.
In the update, seen by The Irish Times, the directors claimed that “the reason cited by the funder for their decision not to continue with its support was due to the adverse public publicity which, in their opinion, caused irreputable [sic] damage to both the reputation and credibility of the company going forward”.
“Unfortunately,” the directors wrote in the update, “following a further disclosure to the media of confidential information . . . no viable solution for future funding has been found”.
“Without investment support,” the directors said the company is now insolvent “in the opinion of the board” and it has had “no choice but to . . . initiate the process to liquidate the company”.
Shareholders, who spoke to The Irish Times on condition of anonymity, said they have significant concerns about the business, their investment and what they claim has been a lack of transparency around the company’s finances and decisions made at the board level over recent years.
In July, a group of disgruntled investors – claiming to represent about 30 per cent of the HiberGene’s shareholders – held an extraordinary general meeting that the board refused to recognise as legitimate. In an update to shareholders on July 31st, seen by The Irish Times, the board said it received a request to attend the meeting but “took legal advice” that the request “did not conform to the requirements of the Companies Act”.
The directors said “the publication of this meeting to the press” had a “damaging effect on our conversations with prospective strategic partners” and “will likely weaken the company’s negotiating position”.
Shareholders were told that the company generated revenues of €708,000 for the first half of 2022, down on just more than €1 million for the same period in 2021. Pretax losses at the firm also rose to €815,000 from €578,000.
At the end of its 2020 financial year, HiberGene Diagnostics owed creditors more than €1.9 million, accounts filed by the company earlier this year showed. The accounts noted that the company had been awarded grant funding of €930,000 from the European Union in 2020, €698,703 of which had been received in the year, and €127,434 from Enterprise Ireland.
HiberGene Diagnostics was also owed €3.4 million from it subsidiary HiberGene Diagnostics Sales.
