Macrophage Pharma

Macrophage Pharma Limited, a Cambridge-based pharmaceutical company, entered administration on 9 February. The Company previously undertook drug discovery research for the ultimate treatment of human diseases, with a focus on cancer in the first instance.

In 2019, following the appointment of a new Chief Executive Officer and a Chief Scientific Officer, the Company developed a new business strategy which focused on new therapeutic targets in regulated cell death, potentially applicable to a range of diseases.

However, in March 2021, the CEO resigned, which triggered a series of meetings in which the future viability of the Company was assessed. The CSO was appointed as the replacement CEO. At this time, the existing investors were reluctant to provide further funding in the absence of a positive outcome from at least one of two pharmaceutical partnerships that were then under negotiation. Despite interest from one potential pharmaceutical partner, the Board was not sufficiently assured that any such funding would materialise in the near-term, or that it would provide sufficient capital to continue to fund existing operations at the requisite level.

The replacement CEO resigned in late 2021 and, taking into account professional advice provided by Cork Gully, it was ultimately determined that administration was the best option available in early 2022.

In their Proposals delivered on 23 March, the Joint Administrators explained that rescuing the Company as a going concern could not be achieved, as no purchaser for the shares of the Company or further investment into the Company could be found with the Company’s current level of debt.

The Joint Administrators further explained that they were considering whether there was a commercial benefit to be obtained by extending the time period in which potential interested parties may submit an offer for the Company’s business and/or assets.

In their Progress Report delivered on 6 September, the Joint Administrators provided an update, explaining that they had ultimately retained two employees, including the CSO, on a contractual basis, to assist with the marketing activities. Access to the Company’s data room was provided to all potential interested parties following execution of a non-disclosure agreement, and detailed discussions were held with four interested parties.

In April 2022, an offer of £5m was received from an interested party in relation to certain intellectual property owned by the Company.

The Joint Administrators then held extensive negotiations with the interested party, including the drafting of a sale agreement and associated documentation, as well as liaising with tax advisors in relation to the tax consequences and structuring of the proposed transaction. The interested party subsequently withdrew its offer in July 2022.

The Joint Administrators are now pursuing a claim for breach of contract in relation to existing agreements in place between the Company and the interested party. Due to the ongoing complexities with regards to the breach of contract, the Joint Administrators have instructed legal counsel and various private investigators to provide assistance in pursuing the action against the interested party. The administration will remain open whilst the Joint Administrators progress the breach of contract claim against the interested party.

Stephen Cork and Anthony Cork of Cork Gully Advisory are the Joint Special Administrators. They are assisted by J A Kemp (patent attorneys), Covington & Burling (drafting of sale agreement and providing associated legal advice) and Bristows (pursuit of contract claim).

The full report can be found HERE.