Syncardia files for Chapter 11 bankruptcy

 

Artificial heart maker SynCardia Systems filed for Chapter 11 bankruptcy last week after pulling an initial public offering last October.

Syncardia makes an artificial heart system designed to replace the functions of both the left and right ventricles and all 4 heart valves, with FDA clearance as a bridge-to-transplant device for heart failure patients.

The company could be looking for a quick asset sale, as it filed its bankruptcy with a stalking horse bid in hand from its 1st lien agent as the buyer, though it did not name the company in question.

The company filed for Chapter 11 over the holiday weekend, saying it has assets between $10 and $50 million, liabilities between $10 and $50 million and payments owed to more than 200 creditors, according to a court filing.

Syncardia pulled its plans for a $27.5 million initial public offering last October.

“The registrant submits this request for withdrawal as it does not intend to pursue the contemplated public offering at this time,” the Tucson-based artificial heart maker said in an SEC filing. Syncardia had planned to float 2.5 million shares at $10 to $12 apiece.

A month earlier, the company faced a Class I recall of the driver for some of its devices it initiated after a single incident in which a patient briefly lost consciousness but suffered no permanent injury. The malfunction was caused by a supplier’s unauthorized rework of a component, the company said last month.

Last June, Syncardia sent a letter to surgeons  warning them about issues with a component of its artificial heart in patients who received pre-implantation circulatory rescue interventions.

A destination therapy trial won FDA approval last January. SynCardia also said it was running a trial for a bridge-to-transplant indication for a smaller version of its device sized for women and children.