A drug company in another state recently determined that its financial situation was too bleak for it to keep doing business as usual. Therefore, the company filed for Chapter 11 bankruptcy. Companies in Massachusetts that are facing difficult financial times may likewise benefit from this type of bankruptcy filing.
In the out-of-state case, Orexigen Therapeutics said it would pursue the sale of the company’s assets as part of its bankruptcy filing. The company produces obesity weight loss prescription drugs. Prior to the bankruptcy filing, it had high hopes for the drug Contrave. However, the drug ended up not being as successful as the company had anticipated. In other words, sales did not reach the necessary level for satisfying the company’s obligations to its creditors.
Orexigen has also faced stiff competition from such companies as Arena Pharmaceuticals and Vivus. On top of that, Orexigen, like other drug companies, has had to deal with the federal food and drug administration’s strict oversight, with federal officials being worried about possible health complications, such as heart issues. In light of this, all three of the abovementioned companies have fared poorly in the United States’ weight-loss arena.
Sometimes, market situations or industry-related issues cause a company in Massachusetts or elsewhere to struggle to stay afloat financially. Fortunately, a company whose liabilities are starting to outweigh its assets does not have to struggle forever. An attorney can guide the company owner through the process of filing for Chapter 11 bankruptcy, which can give the company the second chance it needs to thrive financially.
Source: sandiegouniontribune.com, “Weight-loss drugmaker Orexigen crashes on bankruptcy sale news“, Bradley J. Fikes, March 12, 2018