AORTECH, the heart valve pioneer that started life
in Lanarkshire, has lost $370,000 to two US
companies defaulting on debts, and is engaged in
litigation against former chief executive Frank Maguire.
The business, where Scot Eddie McDaid, a founding director, was reinstalled as chief executive after the departure of Mr Maguire, saw net operating losses widen from $455,000 to $575,000 (£448,000) in another dramatic year that again highlighted the perils facing a small biotech company.
Bill Brown, the Scottish fund manager who chairs the AIM-listed group now based in the US, said: “The principal disappointment of the past year has been the requirement to provide for sums of money contractually due to AorTech.”
The company was owed $150,000 (£117,000) by SynCardia under a $25,000 a month mediated settlement when payments ceased, litigation began, and SynCardia filed for Chapter 11 bankruptcy.
Then iSense, which owed Aortech $219,000 (£170,000) under a licence for the glucose monitoring business, “transferred all the assets of the company to another company of a similar name”.
Mr Brown said: “One of the key tasks assigned to Mr Maguire in the final two years of his employment …was to seek a partner or funding for the polymer heart valve project.”
Mr Maguire had resigned in November 2013, giving three days’ notice.
“Since his resignation, Mr Maguire has worked with Foldax Inc. as its CEO. Shortly after his resignation, AorTech asked Mr Maguire to confirm he had returned to the company all files,
data and confidential information.
“As a result of Mr Maguire’s lack of response, litigation ensued.”
The chairman said: “The ongoing litigation has also been a major consumption of management time and
is likely to continue to
be so.
“AorTech has sought to pursue an alternative dispute resolution route, with the objective being to have our confidential information returned to us.”
He emphasised that AorTech’s claims were disputed by the defendants.
The shares were unmoved at 28.25p.
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