Insolvency shock: Salzburg biotech company fights for survival!

Insolvency shock: Salzburg biotech company fights for survival!

The Austrian biotech companyPromocure Biotech GmbHis insolvent. Restructuring proceedings without self-administration were opened at the Salzburg Regional Court. The company was founded in 2006 in Bergheim, Salzburg, and is active in research and development in the field of biotechnology. The company's production includes medical devices and PCR tests, supported by its own raw material production.

The insolvency is caused by the Covid-19 Transfer Act of June 30, 2023, which drastically reduced the demand for corona tests. The financial impact is significant: there are a total of 48 creditors with claims totaling 5.4 million euros. Fortunately, the employees are not affected by the bankruptcy and the company plans to continue operations with existing consumables as well as finished and semi-finished goods.

Renovation plan in sight

The company expects that sales will be sufficient to cover fixed costs. A restructuring plan with a minimum rate of 20 percent within two years is the aim. However, it remains unclear whether the restructuring plan should be financed exclusively through the continuation of the company or with the support of third parties.

In the larger perspective, bankruptcies represent a significant challenge. In Germany in 2023 around 110,200 bankruptcies recorded, which represents an increase compared to the previous year. What is particularly notable is that 59% of bankruptcies occurred in the service sector. However, the insolvency procedure is intended to create a fair balance between over-indebted debtors and their creditors, as can be seen from the Statista study emerges.

Another example of corporate bankruptcies in the biotech industry isProcomcure Biotech Germany GmbH, whose insolvency proceedings were decided at the Hamburg District Court in December 2024. The company, which is registered in the commercial register of the Lüneburg district court, is headed by Dr. Thomas Wüstefeld and also works in the field of biotechnology, which illustrates the difficulties in the industry.

In the insolvency proceedings, provisional measures such as the appointment of lawyer Dr. Annika Schinkel as insolvency administrator and the restriction of the company's power of disposal were crucial. These steps are aimed at securing the financial situation and settling the claims of creditors, which underlines the urgency of the situation.

Overall, developments in the biotechnology and service industries point to major economic challenges, not only for the companies affected, but also for the entire industry. It remains to be seen how the situation on the market will develop.