Ottawa life-sciences company Avivagen has ceased operations after the embattled firm’s lengthy search for a buyer came up empty.
The publicly traded firm, which specialized in natural immune-boosting substances for pigs and cattle, said this week it has applied for bankruptcy following the collapse of a potential deal to acquire its animal health business.
The TSX Venture Exchange has halted trading of Avivagen’s shares, which plummeted to just half a cent from a high of more than 60 cents in April 2019. The company is expected to be delisted from the exchange shortly.
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“I regret the impact the restructuring and bankruptcy of our business will have on our valued stakeholders,” Avivagen CEO Kym Anthony said in a statement on Wednesday. “This has been an incredibly difficult decision, but is the only one available to us now.”
According to records filed under the federal Bankruptcy and Insolvency Act, Avivagen owes nearly $10.4 million to creditors and has assets of $1,684.
Bankruptcy trustee BDO did not immediately respond to messages from OBJ on Thursday.
The move comes nearly a year after Avivagen said it was reviewing “strategic alternatives” following years of financial losses. The company appointed a special committee of its board of directors last May to review options that included seeking potential buyers.
In a news release Wednesday, Avivagen said the committee “explored many alternatives and engaged with many of the world’s leading animal health and animal feed and nutrition companies, including Fortune 500 companies.”
However, none of those efforts succeeded.
The company said an “international conglomerate” signed a letter of intent to acquire its animal health business, but ultimately chose not to go through with the transaction. Subsequent talks with other parties failed to produce a deal.
“Despite the growing industry enthusiasm for antibiotic-free, sustainable food production and Avivagen’s encouraging field and commercial results, including with customers in multiple countries, there are no viable opportunities to raise additional capital in the current market conditions and Avivagen was unable to identify a suitable solution available in the near term,” the company added.
Falling sales
The bankruptcy marks the end of the road for the two-decade-old firm.
Avivagen touted its products as a natural replacement for antibiotics in cattle and pig feed at a time when health experts are calling the rise of antibiotic-resistant “superbugs” a simmering global health crisis.
The company eventually sold its products in 10 countries, including Australia, the United States and Mexico, and in 2023 it got the green light to launch large-scale trials of its products in China, the world’s largest market for commercial animal feed.
But Avivagen continued to face regulatory hurdles and other challenges, and its sales stalled.
The company posted a net loss of $6.1 million on revenues of $939,000 in fiscal 2022, the last year for which full figures are available. In the first three months of fiscal 2023, Avivagen lost nearly $1.2 million on sales of just $66,000, raising its total accumulated deficit since it was founded in 2005 to $46.3 million.
In financial documents filed in March 2023, management warned that Avivagen “may never be able to successfully develop commercially viable products” in the heavily regulated animal feed industry.
“Whether and when the corporation can attain profitability and positive cash flow is very uncertain,” the company said at the time, adding that unless it could raise additional capital, there was “significant doubt” about its ability “to continue as a going concern.”
