Midatech Pharma’s plans to pivot past its cash crunch have come unstuck. After securing financing and striking a deal to buy Bioasis Technologies, Midatech put its plans to a vote—only for investors to shoot down the proposals and leave the drug delivery specialist with weeks to find an alternative option.
U.K.-based Midatech has landed deals with drugmakers including Johnson & Johnson in recent years on the strength of drug delivery technologies. However, despite interest in its approaches to challenges such as how to extend the dosing of injectable medicines, the company has run into financial problems. Faced with dwindling cash reserves, Midatech proposed a new strategy late last year.
That strategy is now in tatters. At an investor meeting on Monday, Midatech failed to drum up sufficient support from shareholders. Support for every resolution topped 60%. But with the threshold for success set at 75% for some proposals, and other resolutions conditional on their passing, Midatech only met the requirements for one of the actions.
As such, the company lacks the required investor support for its proposed acquisition of Bioasis. Stripped of the transaction at the heart of its turnaround plan, Midatech is staring down the barrel, as it set out in a statement.
“While the Company has sufficient cash resources to fund its operations until mid-March 2023 and the Board will seek to preserve its cash resources as far as practicable, it urgently requires a commitment for alternative sources of funding in advance of mid-March 2023 to be able to continue as a going concern and the Board are exploring options,” Midatech said. “There can be no guarantee that the Company will be able to find alternative sources of funding on a timely basis. If alternative funding is not available, the Directors believe that it is likely that the Company could be forced to enter into administration.”
Midatech responded to the setback by appointing Quantuma Advisory to undertake contingency planning and advise the board on appropriate actions.