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June 21, 2023

New Haven-based Bioasis to suspend operations

Deborah Rathjen
By Michelle Tuccitto Sullo

Bioasis Technologies Inc., a New Haven-based biopharmaceutical company, announced Tuesday it will suspend operations, citing a lack of cash.

The announcement comes following a failed merger agreement with U.K.-based Midatech Pharma.

Bioasis has been working to develop drugs that can cross the brain’s filtering mechanism, known as the blood-brain barrier, to treat brain cancers and other central nervous system disorders. 

The company “is almost out of cash and is no longer in a position to continue funding its operations,” Bioasis announced, in a press release from board Executive Chair Deborah Rathjen.

“The current economic environment and market conditions for small-cap development stage biopharmaceutical companies continue to be very challenging,” the company added.

Back in December, Bioasis indicated it would be merging with Midatech Pharma (now Biodexa Pharmaceuticals), a drug-delivery technology company, for approximately $5.5 million. 

However, the planned merger was terminated in January, after Midatech’s shareholders rejected the arrangement, according to Bioasis. This left Bioasis with “limited cash and significant liabilities,” according to an announcement. 

Bioasis’ debt includes a $350,000 bridge loan from Lind Global Macro Fund, a $500,000 bridge loan from Biodexa and approximately $3.3 million owed to Lind under a 2021 convertible security funding agreement.

Those debts are secured by liens on Bioasis’ assets, and the bridge loans mature on June 30. Bioasis anticipates defaulting on its debts, according to the press release. 

Since the Midatech merger fell through, Bioasis has pursued options such as alternative mergers, a company sale, joint ventures, partnerships and third-party financings.

Bioasis recently signed a non-binding term sheet with Swiss Biotech Advisors for an exclusive worldwide license of some of Bioasis’ assets, however this is not expected to generate cash flow for Bioasis in the short term, according to the company.

Bioasis hasn’t been able to pay its auditors to produce audited financial statements for the year ending Feb. 28, 2022. It will be unable to file required statements prior to the upcoming June 28, 2023 deadline. Bioasis anticipates this will result in the British Columbia Securities Commission issuing a cease trade order in respect of its shares and a suspension of trading of its shares on the TSX Venture Exchange.

Bioasis also indicated the Italian company Chiesi Farmaceutici will be terminating its non-exclusive research collaboration and licensing agreement with Bioasis.

Bioasis has been developing its xB3 platform for delivering therapeutics across the brain’s filtering mechanism, or the blood-brain barrier. Chiesi has advised Bioasis it does not intend to continue to pursue the potential development of xB3.

Bioasis’ drug-development efforts have focused on ailments such as brain cancers, Gaucher’s disease, Parkinson’s disease and Lewy Body Dementia.

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