NEW YORK (GenomeWeb News) – Helicos BioSciences filed for Chapter 11 bankruptcy protection on Thursday.
The Cambridge, Mass.-based single-molecule sequencing firm filed its petition in US Bankruptcy Court for the District of Massachusetts after years of struggling financially and trying to keep pace in the fast-moving next-generation sequencing space.
Under Chapter 11 bankruptcy, Helicos will be afforded the opportunity to reorganize its operations, and the company said that it continues to operate as a debtor in possession.
In a document filed with the US Securities and Exchange Commission today, Helicos said it filed for Chapter 11 protection after its board "determined that continued operation of the company outside of bankruptcy protection is not possible due to its lack of cash resources and no available funding operations."
According to its petition filed with bankruptcy court, Helicos has total assets of $3.5 million and total debts of $15.5 million as of Sept. 30. Among the creditors holding its largest unsecured claims are Stanford University for $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 renamed 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 or RNA.
Helicos went public in the spring of 2007, raising around $50 million in proceeds. 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 late 2008 and in 2009. By the end of 2008, it was forced to trim its workforce by 30 percent and replaced CEO Steve Lombardi with Ronald Lowy.
However, Helicos still had difficulty selling its sequencing system as its stock 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 second quarter of 2012 it reported that its revenues fell 29 percent year over year to $577,000, and it exited the quarter on June 30 with $446,000 in cash and cash equivalents and eight full- and part-time employees.
In its second-quarter filing with the SEC it cautioned that existing funds would not be able to keep the company operational through a scheduled September trial date for litigation between it and Illumina. Helicos had accused the 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-time CEO in mid-September.