A troubled Ottawa-based life sciences firm says it has received “numerous responses” from companies that are interested in potentially acquiring all or part of its operations.
Avivagen announced last month it was reviewing “strategic alternatives” that could include selling the company, which has struggled to gain market traction and racked up tens of millions of dollars in losses since it was founded nearly two decades ago.
The publicly traded firm said Tuesday a special committee of its board of directors that is overseeing the review process “has received numerous responses from firms wishing to engage in preliminary discussions regarding such alternatives.”
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The update came as Avivagen released financial results that showed the company posted a comprehensive loss of more than $1.24 million on revenues of less than $78,000 in its fiscal second quarter ending April 30.
That compares with revenues of just over $88,000 in the same quarter a year earlier, when Avivagen finished $1.3 million in the red.
In its previous update in mid-May, Avivagen said it has reduced its head count and “suspended or terminated” some of its consulting arrangements in Asia and Mexico in an effort to cut costs. The company also announced in late February that it was looking for a new chief executive to replace longtime leader Kym Anthony as it tries to kickstart its global marketing efforts.
Exploring a possible sale is Avivagen’s latest attempt to solidify its financial position after years of heavy losses. The company has accumulated a total deficit of more than $47 million since its launch in 2005.
The company specializes in natural immune-boosting supplements for pigs and cattle. It says it’s conducted dozens of tests that prove the natural antioxidants help ward off disease without the use of antibiotics – a key selling point at a time when health experts are calling the rise of antibiotic-resistant “superbugs” a simmering global health crisis.
Avivagen now sells its products in 10 countries, including Australia, the United States and Mexico. Last year, the company got the green light to launch large-scale trials of its products in China, the world’s largest market for commercial animal feed – a development Anthony predicted would translate into “quite significant revenues” for Avivagen in the long term.
But the addition of China hasn’t boosted the company’s flagging sales.
In financial documents filed in March, management warned that Avivagen “may never be able to successfully develop commercially viable products” in the heavily regulated animal feed industry.
After reaching a high-water mark of more than $4 in early 2007, the firm’s stock has been on a steady decline.
Avivagen’s shares sat at one and half cents on the TSX Venture Exchange at noon on Tuesday, roughly where they have been since early May. The company’s stock price has fallen 19 cents over the past 12 months.
