Diomed files for bankruptcy, plans to sell assets to Biolitec
March 19, 2008, Andover, MA--Diomed, a developer and marketer of minimally invasive medical technologies including its patented diode-laser EVLT treatment for varicose veins, has filed for Chapter 11 bankruptcy, citing the impact of patent infringence on its products as an impediment in the marketplace.
The petition contemplates that Diomed will sell certain of its operating assets to Biolitec AG (Jena, Germany), a manufacturer of medical lasers, optical fibers, and other products, thereby enabling Biolitec to continue to operate Diomed's business in the United States. Diomed and Biolitec have entered into a non-binding letter of intent for the sale of specified assets for a purchase price of $6 million to $7 million.
"The decision to pursue the sale of the company's assets and operations through the bankruptcy process was an extremely difficult but appropriate decision for our Board of Directors to make," said James Wylie, Jr., Diomed CEO. "Despite of our intensive efforts to seek a buyer for the company outside of bankruptcy and to work with our secured lenders to avoid seeking bankruptcy protection, the impact of infringement of the company's products in the marketplace and delays in the judicial process proved impossible to overcome."
With court approval, Diomed will continue operating in the ordinary course of business as a debtor-in-possession while it pursues the sale of specified assets to Biolitec and the sale of its other assets to third parties.
Diomed develops and commercializes minimal and micro-invasive medical procedures that use its proprietary laser technologies and disposable products. Diomed's EVLT laser vein ablation procedure is used in varicose vein treatments. Diomed also provides photodynamic therapy (PDT) for use in cancer treatments, and dental and general surgical applications.