Major healthcare business files for Chapter 11 bankruptcy

Biotechnology companies often encounter common challenges of long timelines for developing their products, the high costs associated with creating their innovations, and regulatory problems that must be solved to bring their inventions to market.

Companies will amass huge amounts of debt over the years that's needed to develop medical devices, drugs, and other products, which can lead to financial distress and sometimes bankruptcy filings.

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Over a 12-year period from 2011 through 2022, biotech firms filed fewer than 10 bankruptcies each year, but that changed beginning in 2023.

Biotech firms filed 14 cases in 2023, which was the highest number since 2010, when 14 firms filed for bankruptcy. Companies filed 13 petitions in 2024.

Economic issues common to all businesses, such as rising costs of labor and products driven by inflation and rising inflation, played a role in distress over the last two years.

AmplifyBio, which develops next-generation vaccines, medicine, and therapeutics, filed for Chapter 11 protection on May 17, 2025, seeking to sell all of its assets and liquidate through the bankruptcy process.

The debtor's largest creditors included 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.

Biotech firms file for bankruptcy

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.

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.

Biotechnology firm Capture Collective files for Chapter 11 bankruptcy.

Image source: Getty Images

Capture Collective files for Chapter 11 bankruptcy

And now, medical diagnostics company Capture Collective Inc., which is developing and commercializing medical testing equipment for early detection of radiation exposure, and two affiliates, filed for Chapter 11 bankruptcy protection on May 27 to reorganize their debts, facing high litigation costs.

The company listed $1 million to $10 million in assets and liabilities in its petition filed in the U.S. Bankruptcy Court for the Southern District of Ohio, including a $5.7 million disputed tax claim owed to its largest creditor Hawaii Department of Taxation.

More bankruptcy:

The Columbus, Ohio-based debtor and affiliates Capture Diagnostics LLC and Capture Diagnostics HIB01 had also faced costly contract disputes as a result of its Covid-19 testing business that ceased operations in May 2023.

Capture Collective was unable to resolve the contract disputes with claimants after the Covid-19 testing business ended.

The company said high litigation costs had exhausted all of its remaining capital resources and made it impossible for the company to obtain new venture capital, according to information provided by RK Consultants.

All litigation filed against Capture Collective and its affiliates is subject to an automatic stay while the bankruptcy case proceeds.

Capture Collective is developing the radiation biodosimetry diagnostic test, MiRAD, a high-throughput, microRNA biomarker-based biodosimetry assay, which enables individualized clinical biomarker quantification in direct correlation with radiation exposure.