A likely buyer is poised to take over troubled drug maker 4D Pharma, whose Irish operation entered receivership on Wednesday.
A deal to swap the Leeds, England-based 4D Pharma’s €13 million secured debt for shares in the business failed last week, leaving the group under the control of administrators appointed by creditors in June 2022.
Ken Fennell and Andrew O’Leary of Interpath Advisory took over as receivers of its Irish operation, 4D Pharma (Cork) Ltd, on Wednesday, at the invitation of the company’s directors.
The receivers will oversee the sale of the Irish assets to an investor understood to be in talks to buy the entire group, should a deal go through. The Cork operation employs 10 people.
Interpath said that the directors decided to invite in the receivers after weighing several options to secure the Irish company’s future following the administrators’ appointment to its British owner.
Administration is a company rescue system used in the UK. There is no Irish equivalent, so the directors opted for receivership.
Mr Fennell said his and Mr O’Leary’s immediate priorities were to “secure the company’s assets, while seeking to gather further information about the company’s financial position”.
Efforts to take the group out of administration stumbled last week when the creditor, New York-based Armistice Capital, decided against a deal to convert its $13.9 million (€13 million) debt to equity.
Armistice bought the debt from original creditor Oxford Finance after joint administrators David Pike and James Clark of Interpath Advisory took over in June. Oxford had secured the debt against company assets.
Following Armistice’s announcement, the administrators put 4D Pharma’s assets and subsidiaries up for sale in a bid to maximise returns for creditors. Interpath did not name the likely buyer on Wednesday.
4D was developing treatments for cancer, asthma and Parkinson’s disease. It was working on trials in partnership with pharma industry players, including Merck, but had yet to get any of its drugs to market.
The company specialises in live biotherapeutics, an emerging group of drugs that use living organisms, such as bacteria, to treat disease.
The group has operations in the Republic, Leeds, Aberdeen in Scotland, Leon in Spain, and in California, New Jersey and Texas in the US.
Oxford appointed Mr Pike and Mr Clark after a fundraising round failed amid stock market uncertainty last year.
4D’s shares were subsequently suspended from trading on London’s Alternative Investment Market and New York’s Nasdaq.
