(Recasts; add details, stock movement)
Oct 7 (Reuters) - Pharmaceutical company AtheroGenics Inc AGIX.O said it filed for Chapter 11 bankruptcy protection due to “substantial debt burden” that hampered the development of its lead product, an experimental diabetes drug.
The filing comes in response to the involuntary bankruptcy petition filed against the company by creditors on Sept. 15 in the U.S. Bankruptcy Court for the Northern District of Georgia after it failed to repay convertible notes due 2008 and 2011.
Shares of the company plummeted 83 percent to 4 cents before the bell. They closed at 24 cents Monday on Nasdaq.
AtheroGenics, which has filed to convert the petition under Chapter 11 of the U.S. Bankruptcy Code, said it expects to sell the company and its key assets during the bankruptcy proceedings.
The company said it could not forecast the amount of these proceeds or whether the combination of sale proceeds and cash on hand will exceed its liabilities. AtheroGenics has retained Merriman Curhan Ford and Co to assist with the sale of the company and its key assets during the Chapter 11 proceeding, and King & Spalding LLP as its legal adviser. (Reporting by Esha Dey in Bangalore; Editing by Amitha Rajan)