Biotech company Virax goes bust as administrators called in

Biotech company Virax has collapsed with Laurie Fitzgerald and Stephen Dixon of Grant Thornton appointed as administrators last week.

Virax developed immunotherapies which boost the immune system to treat diseases.

The company’s board released a statement announcing the appointment and signalling their intention to attempt to salvage Virax.

“The board will be working with the administrators to ensure all opportunities to restructure the company are explored,” the statement said.

Fitzgerald told SmartCompany that at this stage the administrators were looking to explore opportunities.

“I’m meeting with the senior executives tomorrow with a view to working towards some deed of company arrangement,” he says.

“Virax is a biotech company and so involved in research and development and, unfortunately, its revenues have not been sufficient to sustain the research going on.

“Its projects and intellectual property are all long term; the real issue is to get them into a position where they can be cash generators.”

Fitzgerald says the major creditors are all note holders who are owed around $2.5 million and, in the short term, Virax has “no revenue to speak of”.

“It has a number of arrangements and contracts entered into but revenue in those is subject to other developments and milestones on other trials.”

Fitzgerald says the only staff are a “handful” of senior executives who are working with the administrators on restructuring the company, although he cautions a successful restructure is dependent on the creditors.

“It will depend on the appetite of the creditors, particularly the convertible note holders. To date, they have all had a long-term view of the company and we hope that can continue,” he says.