AtheroGenics files for Chapter 11 bankruptcy

Atlanta, USA-based AtheroGenics, a company focused on the treatment of chronic inflammatory diseases, says that it has consented to the Involuntary Chapter 7 Petition filed against the company on September 15 in the US Bankruptcy Court for the Northern District of Georgia, and has filed to convert the case to one under Chapter 11 of the US Bankruptcy Code.

The filing became necessary as a result of the company's substantial debt burden, which created a significant impediment to its ability to effectively develop its primary asset, AGI-1067, its lead product now in Phase III testing as a possible diabetes treatment, said AtheroGenics.

During the bankruptcy proceedings, AtheroGenics expects to sell the company and/or its key assets. Proceeds from any transactions will be distributed to its stakeholders, including its creditors. Prior to the sale process, the firm says it cannot forecast the amount of these proceeds or whether the combination of sale proceeds and cash on hand will exceed its liabilities.