Pictor Biotech, a company created by ex-Novozymes executive Peter Rosholm, has acquired the assets of bankrupt biomanufacturing startup Solar Biotech in an auction process. He plans to retain the US staff and invest a “substantial” sum to expand capacity, AgFunderNews has learned.
Founded in 2019 by Alex Berlin, Virginia-based Solar Biotech specializes in microbial and biomanufacturing technology development and commercialization. It acquired Canadian biomanufacturing startup Noblegen last year, and said at the time that it was focused on “supporting the development of processes and products from a wide diversity of microorganisms like bacteria, fungi, yeasts, and microalgae.”
‘Overexpansion led to cash flow difficulties’
The firm—which had raised over $15 million including an undisclosed sum from Ingredion in 2022—filed a voluntary petition for Chapter 11 bankruptcy protection in late June, explaining that it “became profitable in its second year and remained so until overexpansion led to cash flow difficulties requiring debt restructuring.”
It added: “Our advanced technologies enable the sustainable production of a wide range of bio-based products through clean precision fermentation. This includes food, beverages, and cosmetic ingredients, such as diverse proteins, biooils, and carotenoids, all produced without the need for pesticides or exposure to animal or plant diseases. We utilize proven proprietary microbial strains that are FDA GRAS combined with our unique bioprocess development expertise.”
On the IP front, it said: “Our comprehensive IP portfolio encompasses microbial strains, advanced bioprocess development expertise (both upstream and downstream), and proprietary software and hardware for automation and bioprocess control. We have developed synbio products and technologies specifically tailored for the food and beverages, and cosmetics industries, ensuring a competitive edge.”
New owner to invest ‘substantial sum’ to expand capacity
According to court filings from financial advisory firm Newpoint Advisors Corporation, which has been working with Solar Biotech trying to secure a sale, the debtors “explored strategic investment options during the pre-petition period, and eventually pivoted to an out-of-court sale process.”
While the debtors had struck a deal with Ingredion as a “stalking horse” bidder [an initial bidder on the assets of a bankrupt company], Ingredion was ultimately outbid in an auction process held on September 6 by Rosholm, who submitted a $20 million bid vs the $15.2 million on offer from Ingredion.
In a declaration filed with the bankruptcy court in Delaware on September 10, Pictor Biotech’s sole director and shareholder, Peter Rosholm, explained that he “intends to hire 100% of the debtors’ US-based employees” on “terms equal to or better than their existing employment.” He also “intends to invest a substantial sum of working capital following the closing of the sale to expand capacity and the business.”
According to a Sept 6 court filing, Pictor Biotech has “the financial ability, experience and willingness to perform under the executory contracts and unexpired leases that are being assumed by the debtors and assigned to it in connection with the closing on the successful bidder’s asset purchase agreement.”
The bid was approved today (Sept 12) in a court hearing.
Founder: ‘The focus now is on resuming operations and growing the business’
Solar Biotech founder Alex Berlin—who will remain the CEO and CTO—told AgFunderNews: “The future is bright and we look forward to continuing fostering strong partnerships now with strong financial backing and superb teams.
“All US staff were kept. During the restructuring process we retained everyone and kept working on various internal projects and servicing some customers. As per the Canadian team, we decided to centralize operations in the US and will be moving all the assets to our hub in Virginia, while deploying additional capacity.
“This is really good news because, first of all, it means business continuity,” said Berlin, who worked with Rosholm on a number of projects while at Novozymes. “But now [we also have] solid financial backing, something we could not secure through series A fundraising given the VC climate of the past two years. The team’s focus now is on resuming operations and growing the business.”
He added: “I started this business in 2019 with $100k from my own pocket when no one wanted to talk about the need for scale-up in this industry and all the VC billions were routed towards lab-based synbio companies. Now the business was sold for $20m after five years.”
In 2016, Novozymes separated its biopharma activities into an independent company called Albumedix led by Rosholm as CEO, noted Berlin. “Peter sold the business to Sartorius in 2022 for $500m+. We are lucky to have him onboard guiding and supporting us moving forward.”
Rosholm told us: “I find the Synbio industry very exciting and I am very impressed with Alex Berlin and his team.”
Ken Yager, president at Newpoint Advisors and chief restructuring officer, added: “The debtors have determined, and I, too, believe, that the successful bid represents the highest and best offer for the debtors’ assets. I believe that the successful bid provides for a greater recovery for the debtors’ estates than would be provided by any other available alternatives and represents a fair and reasonable offer to purchase the debtors’ assets included in such bid.”
This is a developing story…
*The case is 24-11402. In re: SOLAR BIOTECH, INC., et al.,Debtors.
