NEW YORK (GenomeWeb) – With new financial backing from a Chinese pharmaceutical firm, Singaporean molecular diagnostics firm Vela Diagnostics is poised to emerge from judicial management and plans to further develop its technology, according to a company official.
In March, the firm went into judicial management, a legal process similar to Chapter 11 bankruptcy protection. Within the next few weeks, Vela could emerge from the court-supervised reorganization plan, setting the stage for a new chapter in its business operations, Vela Marketing Communications Manager Esther Chew told GenomeWeb in an email.
After it comes out of judicial management, Vela would be allowed to operate freely without having to seek approval from court-appointed managers first, especially in financial matters, and plans to expand its portfolio of tests and data reporting solutions for PCR and next-generation sequencing and to develop its worldwide distribution network, Chew said.
According to Chew, Vela was forced to go into judicial management after its original investors, which she declined to identify, pulled out. Though interested parties made offers to acquire the company, the investors declined them. As a result, Vela sought judicial management from the Court of Singapore, under which Vela continued to be functionally operational and solvent.
Judicial management protected the firm from its vendors, as well as its shareholders, who were Vela's largest creditors, making it "the best solution as it allowed us more time to source for the most suitable investor who believes in the value of the company and will be able to partner with us for the long run," she said.
That new partner is Luye Pharma Group, a Chinese pharmaceutical firm with offices throughout that country, as well as in Hong Kong, Singapore, and Princeton, New Jersey.
Chew declined to comment about Vela's finances, saying only that Luye Pharma will fully fund Vela until it expects to break even. Vela, she added, is currently debt-free. The company has more than 80 employees, down from about 210 when it went into judicial management, but by the end of the year, it expects to have around 120 workers. Michael Tillmann remains Vela's CEO.
Chew said that being in judicial management forced Vela to delay certain product launches and it "lost commercial opportunities due to the lack of funds." Marketing work was also halted, negatively impacting brand awareness.
All of its contractual agreements were honored, however, and Vela's R&D work continues. Also, its US operations in Fairfield, New Jersey, have been reestablished, she said.
Progress was also made on the regulatory and commercialization front while Vela was in judicial management. A number of its tests received clearance from Australia's Therapeutic Goods Administration (TGA) in the past six months, including the Sentosa SQ Colorectal Cancer NGS Panel, the Sentosa SQ Non-small Cell Lung Cancer Panel, and the SQ Melanoma Cancer Panel, all of which are CE-IVD marked.
The company also launched the CE-IVD marked Sentosa SQ Thyroid Panel in April, which recently received approval from TGA.
Meanwhile, the Sentosa SQ Leukemia NGS Panel is currently available for research use only and is awaiting CE-IVD marking and TGA approval, Chew said, while Vela continues to work on pre-submissions to the US Food and Drug Administration for its panels.
Additionally, Vela is developing the Sentosa SQ HIV Genotyping assay and is expanding its menu of PCR-based tests for blood-borne diseases and immunosuppression. It also plans to expand its cell-free DNA portfolio, Chew said.
Vela's policies and procedures were reviewed during the judicial management period "to see how to streamline the system to increase efficiency," and with the changes made, "Vela is able to accelerate its growth," according to Chew.
In 2012, the company signed a licensing and supply agreement with Life Technologies, now part of Thermo Fisher Scientific, to provide Vela the rights to develop clinical diagnostic tests based on the Ion Torrent semiconductor sequencing technology. That arrangement has not changed, Chew said.
"The relationship with Thermo Fisher has always been cordial, and they have been very understanding throughout," she said. "Thermo Fisher is still manufacturing and supplying our NGS platform to our specifications."
As it moves forward, Vela is targeting an expansion into new regions with a particular focus on China, a strategy that should be aided by its partnership with Luye Pharma, which is collaborating with Vela to bring the firm's diagnostic solutions to the Chinese market.
With the approvals by TGA of four of its assays, Vela will also be expanding its presence in Australia.
In addition,Vela will market and promote its portfolio of PCR and NGS products and increase the visibility of its brand, Chew said. In the coming months, the company also plans to launch new products and to collaborate with institutions, hospitals, and laboratories worldwide.