NEW YORK (GenomeWeb News) – Helicos BioSciences filed for Chapter 11 bankru
ptcy protection on Thursday.
The Cambridge, Mass.-based single-molecule sequencing firm filed its petitio
n in US Bankruptcy Court for the District of Massachusetts after years of st
ruggling financially and trying to keep pace in the fast-moving next-generat
ion sequencing space. Under Chapter 11 bankruptcy, Helicos will be afforded
the opportunity to reorganize its operations, and the company said that it c
ontinues to operate as a debtor in possession.
In a document filed with the US Securities and Exchange Commission today, He
licos said it filed for Chapter 11 protection after its board "determined th
at continued operation of the company outside of bankruptcy protection is no
t possible due to its lack of cash resources and no available funding operat
ions."
According to its petition filed with bankruptcy court, Helicos has total ass
ets of $3.5 million and total debts of $15.5 million as of Sept. 30. Among t
he creditors holding its largest unsecured claims are Stanford University fo
r $81,200; Flagship Ventures Management ($27,525.52); Roche Diagnostics ($50
,869.60); GE Healthcare Bio-Sciences ($75,000); Goodwin Procter ($568,903);
and Wilmer Hale ($238,997).
The company was founded in 2003 under the name Rare Even Medical, then renam
ed Newco LS6, and finally Helicos BioSciences. The founders included Steven
Quake, Eric Lander, Noubar Afeyan, and Stan Lapidus. Its flagship technology
called the Helicos Genetic Analysis Platform enables the analysis of large
volumes of genetic material by directly sequencing single molecules of DNA o
r RNA.
Helicos went public in the spring of 2007, raising around $50 million in pro
ceeds. It took the first order for its sequencing system in early 2008, but
the firm cut its forecast for the number of systems it expected to sell in l
ate 2008 and in 2009. By the end of 2008, it was forced to trim its workforc
e by 30 percent and replaced CEO Steve Lombardi with Ronald Lowy.
However, Helicos still had difficulty selling its sequencing system as its s
tock price continued to plummet, resulting in its shares being delisted from
the Nasdaq two year ago.
The firm has not yet disclosed its earnings for the third quarter. For the s
econd quarter of 2012 it reported that its revenues fell 29 percent year ove
r year to $577,000, and it exited the quarter on June 30 with $446,000 in ca
sh and cash equivalents and eight full- and part-time employees.
In its second-quarter filing with the SEC it cautioned that existing funds w
ould not be able to keep the company operational through a scheduled Septemb
er trial date for litigation between it and Illumina. Helicos had accused th
e San Diego-based firm of patent infringement, but in late August a federal
court granted Illumina's motion for summary judgment and declared US Patent
No. 7,593,109 held by Helicos invalid for "lack of written description."
Helicos also has not had a CEO since Ivan Trifunovich resigned as its part-t
ime CEO in mid-September.
