Aksys to shut down operations

[Epoman]

http://www.renalbusiness.com/hotnews/71h2210342859088.html

LINCOLNSHIRE, Ill.—Medical device manufacturer Aksys Ltd. will be shutting down after the company could not get the third-party financing it needed to continue operations, according to a regulatory filing.

Aksys had been trying to sell its assets or get third-party financing for a period of “many months,” according to a filing this month with the U.S. Securities and Exchange Commission. Durus Life Science Master Fund Ltd., which owns approximately 75 percent of Aksys’ shares and common stock, told Aksys it would not continue to fund the company without the extra financing.

Aksys manufactured the PHD Personal Hemodialysis System, which allowed kidney disease patients the opportunity to dialyze at home instead of in-center. The company, however, has been plagued by mounting financial troubles. According to Aksys' last quarterly report filed with the SEC in November 2006, the company had a total comprehensive loss of approximately $24.5 million over the first nine months of 2006.

After months of warnings, Nasdaq delisted Aksys in December 2006 because the company could not complete equity financing or increase its market value to $35 million and maintain that level for 10 consecutive trading days.

By January 11 there was no sale or extra financing so Aksys’ board of directors voted in favor of “curtailing all operations and commencing a winding down of its business.”

Durus and Aksys had entered into a loan agreement June 23, 2006, for approximately $5.4 million. On January 12, Durus agreed to extend that loan $1.64 million to a total of $7.04 million to help Aksys “wind-down its operations in an orderly manner,” according to the filing. Durus has loaned a total of $22.4 million to Aksys.

Most of Aksys' employees have been let go with the company retaining a small staff—including Aksys CEO Howard Lewin--for a short period of time as the Aksys winds down operations, according to the filing.

Aksys patients, however, were already being transitioned off the PHD machine prior to the closing announcement. As of September 2006, Aksys had 81 patients using the PHD System—a drop of 50 percent over the previous year. The decline had reflected a company-wide restructuring plan to reduce spending. However, no formal patient transition plan to deal the with company's impending closing has been formally announced by Aksys.

[Sluff]

Was Aksys a main player in the industry? I wonder who will benefit from this business closure. Do you think it was just poor management or are they really not making money? Guess I have more questions than answers here but with the medical field I can't believe that they are not making money.

Wonder if it's just going out of business or will it be  another Enron scandel.

[BigSky]

Not sure how big  a player they were but when I asked my doctor about the various home machines and his thoughts he felt their machine was the best out their for patient use at home.

[jedimaster]

Yes, their machine were a bit better for home use than most on the market....shame.

[billable]

I was talking with a former employee a few weeks ago.  They felt that it was just mismanaged.  It was a great system, from what I understand, but you can't spend money that you don't have.  They said that people were flying first class, staying in the most expensive hotels, etc.  Just didn't try to control expenses.

All that is hearsay, but it makes sense.  Just because you have a great product, that doesn't mean you can forget that it is a business.

[Epoman]

I was talking with a former employee a few weeks ago.  They felt that it was just mismanaged.  It was a great system, from what I understand, but you can't spend money that you don't have.  They said that people were flying first class, staying in the most expensive hotels, etc.  Just didn't try to control expenses.

All that is hearsay, but it makes sense.  Just because you have a great product, that doesn't mean you can forget that it is a business.

/Paging Bill Peckham, Paging Bill Peckham. Will a Mr. Bill Peckham please come this thread.