Key healthcare company files for Chapter 11 bankruptcy

High levels of debt obligations have led several biotechnology and pharmaceutical companies into financial distress, requiring them to file for bankruptcy and, in many cases, seek sales of their assets.

Debtors have often run out of options to obtain capital to refinance debt and will turn to their secured lenders to seek an acquisition of their assets.

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Biotechnology company bankruptcy filings have been rising over the last two years with firms continuing to file petitions in 2025.

Biotech firms filed fewer than 10 bankruptcies each year from 2011 through 2022, but filings began increasing in 2023 with 14 cases and another 13 in 2024. Filings in 2023 were the highest since 2010, when 14 biotech firms filed that year as well.

Significant Chapter 11 filings in 2025 have included Omega Therapeutics, which filed its petition on Feb. 10, 2025, with a restructuring support agreement that called for its parent affiliate Pioneering Medicines 08-B to be the stalking-horse bidder with a credit bid of $9.92 million in debtor-in-possession financing, a roll-up of about $1.5 million in prepetition debt, assumed liabilities, and cure amounts.

Biotech companies sell assets to lenders

Also, Austin, Texas-based biotechnology company Molecular Templates Inc., which develops cancer treatment drugs, filed for Chapter 11 bankruptcy on April 20, 2025, with plans to hand its assets to its secured lender as part of a restructuring support agreement.

Distressed biotechnology company Synthego Corp. filed for Chapter 11 bankruptcy protection on May 5, seeking to sell its assets to its prepetition lender Perceptive Credit Holdings III L.P. in a bankruptcy sale with a stalking-horse bid calling for a credit bid of $74.4 million of debt owed to the lender, as well as a $12.5 million DIP financing.

AmplifyBio files for Chapter 11 bankruptcy to sell its assets.

Image source: Getty Images

AmplifyBio files for bankruptcy

Finally, financially challenged biotechnology company AmplifyBio, which develops next-generation vaccines, medicine, and therapeutics, filed for Chapter 11 protection, seeking to sell all of its assets and liquidate through the bankruptcy process.

The West Jefferson, Ohio, debtor filed its petition in the U.S. Bankruptcy Court for the Southern District of Ohio, listing $100 million to $500 million in assets and $50 million to $100 million in liabilities.

More bankruptcy:

AmplifyBio's largest creditors include certain shareholders, including Battelle Services Co., owed $3.25 million; Battelle Memorial Institute, owed $1.89 million and Kavra 14 LLC, owed $1.8 million.

The debtor, which was spun out of Battelle Memorial Institute in 2021, faced persistent financial and operational challenges with high fixed and variable costs, according to a declaration by Chief Restructuring Officer Kasey Rosado. The company reported annual net losses of $26 million in 2022, $56 million in 2023, and $74 million in 2024.

AmplifyBio currently has about $3 million in cash on hand and $30 million in unsecured debt obligations. In early February, the debtor defaulted on $28.07 million in debt owed to prepetition secured lender Hercules Capital Inc.

The company launched a review of strategic alternatives and determined in April 2025 that its operations were no longer viable and terminated all of its employees. The company seeks to obtain $2.5 million in debtor-in-possession financing from Battell Memorial to fund the company through its sale process in bankruptcy.