After defaulting on a certain loan covenant, BIND Therapeutics Inc (NASDAQ: BIND) is seeking room to allow it to restructure its business. The company has filed for Chapter 11 bankruptcy protection. In the restructuring process, the company could raise fresh capital, seek new partners or monetize some of its technologies to raise funds to keep it in business. BIND counts Pfizer Inc. (NYSE: PFE) and AstraZeneca plc (ADR) (NYSE: AZN) as some of it research partners.
BIND Therapeutics Inc (NASDAQ:BIND)’s Chapter 11 filing came just days after its lender Hercules Technology III LP informed it that it was in default of their loan agreement. Hercules is demanding immediate repayment of $14.5 million under its loan agreement with BIND Therapeutics. But faced with cash shortage, BIND Therapeutics is currently not in a position to meet those demands and has run to the courts to seek protection against the creditor seizing its assets.
BIND Therapeutics’ CEO, Andrew Hirsch, admitted that the notice of default from the lender Hercules triggered the Chapter 11 filing. According to the CEO, the board in its wisdom decided that bankruptcy filing was in the best interest of the company, its creditors as well as debtors.
BIND Therapeutics Inc (NASDAQ: BIND)’s shareholders include David Koch and Polaris Partners.
The Chapter 11 case will allow BIND Therapeutics some time to restructure its business. For example, the company could return to the equity market for a secondary offering to raise additional cash. The company could also seek new partners to inject more money into its business to enable it fund operations and meet its debt covenants. BIND Therapeutics could also sell some or all of its technologies to raise money. Renegotiating with lenders for favorable loan terms is also possible to get the company back on its feet.
BIND Therapeutics Inc (NASDAQ: BIND) is engaged in the work of developing cancer treatments and it works with various partners including Pfizer on those projects.