Asterand value halved as fire sale looms

Asterand's share price was cut in half as investors began to exit the company when it announced a continued lack of working capital has forced it to commence a formal sales process.

The Cambridge biotech has defaulted on debts associated with Silicon Valley Bank (SVB) and BioSeek, the company it acquired at the beginning of 2010. While it has 120 days to remedy the BioSeek situation, Asterand says it has no such time frame with SVB, forcing the company into what seems likely to be a fire sale.

The Cambridge biotech has defaulted on debts associated with Silicon Valley Bank (SVB) and BioSeek, the company it acquired at the beginning of 2010. While it has 120 days to remedy the BioSeek situation, Asterand says it has no such time frame with SVB, forcing the company into what seems likely to be a fire sale.

Asterand says it is in discussions with a potential funder for the business that would result in it being refinanced and able to move forward as a going concern, however, the company admits there are no guarantees of a successful conclusion to the deal and that other options need to be explored, including a potential sale of all or part of the business.

Asterand, which supplies human tissue services to the biotech sector, first revealed the extent of its financial woes at the end of August this year, which then slashed its share price by over half. This afternoon it fell as low as 1.6p a share, down 80 per cent on that August price and over 50 per cent below yesterday's 3.25p a share. Its market cap was £2.25m compared to over £10m in August.

Previously Asterand said the demand for its products and services was high, however, it had been unable to meet them, resulting in a retraction in non-BioSeek revenues. This supply problem may also prevent it from fully realising its $5.4m contract with the National Cancer Institute (NCI), a group facing its own funding issues having told Asterand it wouldn't be able to offer an extension to contract, a deal potentially worth $24.3m (pdf).

Asterand says it has received dispensation from certain regulatory requirements, which among other things will keep the identity of any potential buyers anonymous.

Asterand says it wants a potential offer tied down by the middle of November and will give preference to cash only offers due to the short time frame.

 

blog comments powered by Disqus