Maker of Bacteria Detection Devices Files for Bankruptcy Help
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Maker of Bacteria Detection Devices Files for Bankruptcy Help

January 11, 2013


A Colorado-based company that specializes in creating technology that detects harmful bacteria is filing for bankruptcy help, according to a report from the Denver Post.

Sources say MicroPhage, a medical technology company with limited assets and debt that could reach as high as $10 million, filed for Chapter 11 bankruptcy last week in U.S. Bankruptcy Court in Colorado.

The company’s financial fall from grace is a somewhat surprising twist, given its relative success in just a decade of existence. MicroPhage was founded in 2002 by a team of scientists using technology that had been developed at the Colorado School of Mines, a well-regarded engineering school known for its technological breakthroughs.

As early as 2003, the company was already honing its bacterial detection technology to be used in clinics, which led to the creation of KeyPath, a novel tool that detected the presence of bacteria in a minimally invasive manner.

Sources say the product was similar in size and appearance to home pregnancy kits, and measured a patient’s blood painlessly and efficiently. When the product was used, it could reportedly determine whether a patient had methicillin-resistant staph infections, a growing health concern, within a matter of hours.

This technology was embraced by clinicians because the old procedures required a wait of up to three days to determine whether a patient had a staph infection.

By then, of course, it was often too late to successfully intervene. But MicroPhage faced a burden that often defeats medical technology startups before they reach the stage of financial viability.

That is, MicroPhage had to convince regulators that its product was safe. In 2009, the company gained permission to market its product in Europe, but it did not receive permission from the U.S. until 2011, thanks to some concerns on the part of the Food and Drug Administration.

MicroPhage had a distribution deal with Cardinal Health, which has the right to sell KeyPath in North America. In return, Cardinal Health was expected to help provide operational funding for the young company.

This funding, apparently, was not enough, which led MicroPhage to go to bankruptcy court. But the company’s ingenious product still gives it hope for the future.

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