IBio’s losses threaten its public listing

IBio, a Newark-based biotechnology company, continues to post big losses and is now at risk of losing its public listing on the New York Stock Exchange. Staffers at the exchange sent the company a letter saying sustained losses imperil the company financially, according to a weekend announcement from iBio.

IBio, which helps fund research and development of plant-based vaccine technology at the government-backed Fraunhofer Center for Molecular Biotechnology in Newark, must submit a plan to get back on sound financial footing by Jan. 25.

Its ability to raise money could be severely restricted in the event of a delisting, but company leaders say that’s not likely.

“This is an ordinary process, and we will follow it by presenting the requested plan and by convincingly implementing it by Jan. 25 as requested,” said Robert Erwin, iBio’s president.

IBio lost $12.1 million in its year ending June 30, recording revenues of just over $520,000, according to an annual financial statement filed with regulators in September. The company, which employs seven people and has offices at the Delaware Technology Park in Newark, spent $5.6 million on research and development during the last two years, with losses totaling more than $18 million.

It is not uncommon for early-stage biotech companies to post losses for years while attempting to market products. But iBio’s losses appear to be mounting quickly, and a delisting could threaten its ability to fund operations, said Richard Segarro, director of research at Ford Equity Research in San Diego. IBio netted $7.2 million through an offering of its stock last year, financial statements show.

“A company that doesn’t have access to the capital markets is going to have difficulty continuing to fund their R&D until they get to the point where a product is commercially viable,” Segarro said.

IBio is not without prospects.

In January, the company licensed its technology to Brazilian firm Fiocruz/Bio-Manguinhos, which produces vaccines for the Brazilian government, to develop a yellow fever vaccine. The company is also testing H1N1 and avian flu vaccines on humans in early-stage clinical trials and has tested a malaria vaccine on animals.

IBio also hopes its technology could be used to produce bio-similar drugs, or generics for medicines developed from biological materials. Such drugs are used to treat certain cancers and multiple sclerosis, among other ailments. Federal regulators are working to creating a process for approval of such drugs in the U.S.

Fraunhofer, which has partnered with iBio since 2003, is also backed by millions from the U.S. Department of Defense, the Bill and Melinda Gates Foundation and the state of Delaware.

Ibio’s stock lost 12.11 percent, or 23 cents, on Monday to close at $1.67. Shares had reached $5.85 after announcement of the deal in Brazil back in January.

Contact Jonathan Starkey at 324-2855 or jstarkey@delawareonline.com.