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Troubled Accentia buys time with Chapter 11 filing

By Jeff Harrington, Times Staff Writer
In print: Tuesday, November 11, 2008

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Tampa drug development company Accentia Biopharmaceuticals Inc. filed for Chapter 11 bankruptcy reorganization Monday in a bid to buy time to find more funding or partners.

Accentia executives vowed to continue operations and ultimately pay all secured and unsecured creditors in full.

The global credit crunch was a key factor in the filing, the company said, noting that it wasn't alone. It cited a recent report by the Biotechnology Industry Organization indicating 28 percent of the 370 small biotech companies in the country are operating with less than one year's worth of cash.

Accentia general counsel Samuel Duffey said his company has used stock as the primary currency to fund operations. But its stock price has tumbled dramatically, with the flight of investors exacerbated last week when it was delisted from the NASDAQ exchange because its market capitalization had fallen below required levels.

"The recent collapse of the debt and equity markets have made it impossible'' to finance the company's drug pipeline, Duffey said during a 10-minute conference call with analysts late Monday.

Duffey did not take questions after the call and Dr. Francis O'Donnell, an ophthalmologist who has been Accentia's chief executive and largest shareholder, did not speak.

One of the company's key drugs is SinuNase, targeted to treat people with chronic sinusitis.

The filing also includes Biovest International Inc., a majority-owned subsidiary of Accentia in Massachusetts. Biovest is developing an anticancer vaccine geared toward treating non-Hodgkin's lymphoma.

Accentia made headlines two years ago when Tampa was cited as the favorite to land a $30-million factory for making the anticancer vaccine, creating 200 jobs initially. St. Louis ended up edging out Tampa for the plant.

The company's ailing stock slumped 55 percent Monday to close at 10 cents a share.

Accentia isn't the only bay area public company struggling to rebuild its investment base. Clearwater boatseller MarineMax Inc. and Clearwater aircraft electronics manufacturer Aerosonic closed Monday at $1.25 and $1 a share, respectively.