Financially pressed Bind Therapeutics Inc. said Monday it has filed for federal bankruptcy protection after the breakdown of talks to restructure its debt, a rare misstep for one of the many Cambridge biotechs spawned by Kendall Square giant Robert Langer.
Bind last month said it was slashing its workforce by 38 percent and seeking a partner to help develop its lead cancer drug. It will continue operating with 61 employees as it reorganizes under Chapter 11 of the US bankruptcy code, said chief executive Andrew Hirsch.
Hirsch, who took over as CEO last year, said Bind’s bankruptcy filing was precipitated by an April 26 notice from lender Hercules Capital, a Palo Alto, Calif., venture debt firm that demanded payment in full of the $13.2 million balance on its loan, along with $1.2 million in fees.
“I understand they think they have a legal right to do this,” Hirsch said in an interview. “I was a bit surprised that they did it . . . Complying with that notice would have effectively meant liquidating the company. We felt our only course of action was to file Chapter 11.”
An executive from Hercules didn’t return phone calls seeking comment.
Ten-year-old Bind is one of many biomedical companies started in part by Langer, a Massachusetts Institute of Technology institute professor. Langer and his cofounder, Harvard Medical School professor Omid Farokhzad, created a technology that enables the development of “programmable nanomedicines” designed with physical and chemical characteristics to precisely target cells or tissues to treat a range of diseases.
Bind went public in 2013 through an initial public offering that raised $76.1 million, and it raised another $20 million in a follow-on offering last year. While it forged collaborations on other development programs with drug makers Pfizer Inc. and AstraZeneca PLC, the Cambridge company had been seeking a partner to help fund its lead drug program, an experimental treatment for advanced non-small cell lung cancer.
The layoffs it began last month, which include shutting down an 11-person research operation in Russia, were intended to slow its cash “burn rate” while it searched for a partner and tried to restructure its loan with Hercules, according to Hirsch.
Bind had about $40 million in cash and short-term investments at the end of last year, but the cash was needed to sustain its drug discovery efforts into the fourth quarter as it looked for a partner. The accelerated payment demand from Hercules on its largest loan would have forced it to curtail those efforts, company executives said.
Hirsch, who joined Bind in 2012 as chief financial officer, said he was disappointed the company had to seek bankruptcy protection but said it plans to move forward.
“I would have loved to reach a mutually agreed-upon loan restructuring [with Hercules] that avoided this,” he said. “We know the technology works. The challenge we have as a company is how the technology is applied. We just need to find a partner or raise capital to move the company forward.”
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