A Medical Device Daily

Nanogen (San Diego), developer of molecular and rapid diagnostic products, said it has filed for bankruptcy and has agreed to sell substantially all of its assets to The Elitech Group (Eindhoven Area, the Netherlands), a private diagnostics company, for $25.7 million.

The deal is subject to approval from the bankruptcy court, Nanogen said, which may solicit better offers for the assets through an auction process.

The filing does not affect the operations of Nanogen Advanced Diagnostics (NAD; Milan, Italy), the company's European affiliate, or NAD's creditors and lenders as NAD is not a party to the company's bankruptcy filing, Nanogen noted. After deal closing, Elitech will acquire ownership of NAD.

On Jan. 21, Nanogen reported that it would seek alternatives to the previously disclosed share exchange agreement with Elitech. Despite extensive and thorough efforts by the company and its advisors, Nanogen said it was unable to secure sufficient working capital or alternative corporate transactions to enable the company to service its debt obligations and fund its operations. Nanogen's management said it believes that filing for relief under Chapter 11 and the proposed sale of its businesses are in the best interest of the company, as well as its partners, vendors, customers and creditors.

Nanogen said it will not have sufficient proceeds to permit distributions of cash or other property to its holders of common stock unless the company succeeds in selling its assets for an amount significantly in excess of the amount contemplated by the asset purchase agreement with Elitech.