(Adds comment from Protein Sciences CEO and Emergent's
NEW YORK, June 23 Creditors of Protein Sciences
Corp filed court papers to put the maker of a vaccine for the
H1N1 flu into bankruptcy, and the company's CEO warned that the
"gloves were off" in a battle against "bad people."
A week after Protein Sciences ramped up production of its
vaccine, three creditors with total claims of $11.7 million
filed an involuntary Chapter 7 petition in Delaware late on
Monday, asking the bankruptcy court to appoint a trustee to
The bankruptcy filing listed a subsidiary of Emergent
BioSolutions (EBS.N) as the largest creditor in the Chapter 7
filing, with a claim of $11.5 million.
In May 2008, Protein Sciences reached an agreement to sell
the company to Emergent for as much as $78 million in cash,
convertible securities and future payments, but the deal soon
Meriden, Connecticut-based Protein Sciences said last week
it began producing up to 100,000 doses per week of a vaccine
that protects humans against the H1N1 flu, which the World
Health Organization has declared a pandemic.
The company has said it was told by the U.S. government
that it had been awarded a $150 million five-year contract to
develop its flu vaccine, although the contract has not yet been
Protein Sciences' chief executive, Dan Adams, called the
bankruptcy filing a "strategic move" and said it would not
"They've tried every trick in the book," said Adams, a
co-founder of biotech company Biogen Idec Inc. "I'm tired of
being abused by these people. They're bad people and they will
pay for that."
Emergent of Rockville, Maryland, said earlier this month
that it had filed suit to take possession of Protein Sciences'
assets, which collateralized a $10 million loan that it made to
Protein Sciences in connection with acquisition agreement.
"Protein Sciences walked away from that transaction a year
ago after defrauding us. They committed fraud by encouraging us
to lend them $10 million without ever intending to proceed with
the asset purchase agreement," said Denise Esposito, Emergent's
senior counsel. "This is not a scheme to purchase the company
for less than fair value. There's no way to protect the
collateral except with court oversight."
Shares of Emergent BioSolutions were down 0.4 percent at
$13.99 at mid-day.
The case is In re: Protein Sciences Corp, U.S. Bankruptcy
Court, District of Delaware, No. 09-12151.
(Reporting by Tom Hals and Santosh Nadgir; Editing by Lisa Von
Ahn and Steve Orlofsky)