LSBC files bankruptcy

However, with assets of approximately $9.8 m ($8.1 m) and debts in the region of $7.8 m the company expects to be able to pay off all the creditors and have additional funds left over for shareholders, according to Robert Erwin, chairman of the company's board of directors.

The creditors include Agility Capital, Kentucky Technology, Woodlawn Foundation, Seneca Meadows Corporate Center III Limited Partnership, >LSBC's​ CEO Kevin Ryan and Robert Erwin.

After being unable to bail itself out of trouble with an acquisition or lisencing partner for its products, LSBC shut down last month after running out of cash and failing to raise enough money from a bridge loan, closing its facilities in California and Kentucky and making 69 staff redundant.

The biotech company was a pioneer in the field of plant-produced medicine involving the use of tobacco plants as biological factories. Using its biomanufacturing approach, the company inserted the genetic sequence coding for a desired compound into a virus that infects tobacco plants.

This tobacco mosaic virus was based on RNA, so it did not combine with the tobacco plant's genetic material. This did away with the need to genetically modify the plant, avoiding the high cost and length of time taken to develop transgenics and also bypassing environmental concerns about GM material, as many people are alarmed about the potential of GM traits finding their way into the food chain.

Making pharmaceuticals in crop plants such as tobacco seemed an attractive proposition because they are inexpensive to grow, and could produce vast quantities of drugs or vaccines at low cost, potentially making it possible to make drugs that were not economically feasible before.

But plant-produced medical protein has never been approved by the Food and Drug Administration before and it was always going to be a challenge for a company the size of LSBC to source funding to run the costly clinical trials.

LSBC had several products in development using its biomanufacturing approach, however, like many biotech companies before it, the company never really managed to get its products off the ground before going bust.

Many deals with large pharma companies were discussed, in particular for LSBC's flagship product aprotinin, an anti-inflammatory protein used in cardiovascular surgery, but these never materialised in time.

Early last year LSBC and Bayer CropScience agreed to enter into a research and development collaboration to investigate the plant-based expression of lysosomal acid lipase (LAL) - a plant-derived human enzyme that breaks down lipids - one of LSBC's pharmaceutical products for Orphan diseases, but this deal ended up falling through.

Incidentally, last week Bayer acquired another rival company that is involved in the development and use of engineered plants to create pharmaceuticals, Germany's Icon Genetics.

LSBC was also involved in a manufacturing deal with privately-held Planet Biotechnology, to extract and purify the latter's lead product, CaroRx, a plant-made antibody to control dental caries which was shown in clinical studies to prevent the adhesion to the tooth surface of decay causing bacteria, which is currently approved for sale as a medical device in the European Union.

Planet biotechnology was unable to be contacted to confirm who is now manufacturing the product.