SeraCare beats odds to rejoin Nasdaq
SeraCare Life Sciences Inc. has come back from the dead.
The once-troubled Milford company, which filed for Chapter 11 bankruptcy in March 2006 and was dropped from the Nasdaq market exchange shortly afterward, emerged from bankruptcy protection last year and is slated to begin trading again Monday on the Nasdaq.
"We're very excited about it," said chief executive Susan Vogt, who was a division president at Millipore Corp. in Billerica before joining SeraCare two years ago. "It reflects the fundamental strength of the business and the management team."
Though many life sciences companies limp along for years before developing a successful product, it's less common for one to be wounded so badly that it is forced into bankruptcy and delisted, only to be reinstated within a couple years.
Still, SeraCare isn't unique, said Peter Rosenblum, an attorney at Boston law firm Foley Hoag.
"You do see companies revive more frequently than you would think," Rosenblum said. "There are sophisticated investors who will make it happen for the right situation. The key is how good the technology is and how strong the portfolio is."
SeraCare, which makes materials used in diagnostic tests and drug discovery, became an independent public company in 2001 and grew rapidly through a series of acquisitions. Many of its products are derived from human plasma.
But in December 2005, the company's outside auditor, Mayer Hoffman McCann PC, raised concerns about accounting practices. After an internal probe, SeraCare fired its chief executive and chief financial officer, saying its financial statements were incorrect. The Securities and Exchange Commission quickly launched its own probe and SeraCare soon filed for bankruptcy.
At the time, SeraCare was based in Southern California. But to save money, it consolidated operations in Massachusetts. The company gradually put its business back on track, recruiting a new management team and raising more than $20 million. It signed a $23.7 million federal contract with the National Institute of Allergy and Infectious Diseases and sold its genomics unit in Cambridge for $2 million in cash, plus royalties. SeraCare emerged from bankruptcy in May 2007 with the same group of shareholders and a plan to repay its creditors in full.
The company is still losing money, though it came close to breaking even last quarter. In the three months ended March 31, it reported $12.5 million revenue and a loss of $330,651. About half its revenue came from five customers, including the federal government, Abraxis Bioscience Inc. of Los Angeles, and Roche Molecular Systems, a unit of the Swiss pharmaceuticals giant, Roche Holding AG.
In addition to its Milford headquarters, SeraCare also has satellite offices in West Bridgewater and Maryland. It has about 230 full-time employees, including 140 in Massachusetts.
SeraCare says it is still under investigation by the SEC and Department of Justice, dating from its accounting problems a few years ago. But Vogt said she doesn't believe the probes should pose a concern because the company has "cooperated fully" with investigators and answered their questions.
Todd Wallack can be reached at twallack@globe.com.
