Dartmouth drug discovery company IMV has entered creditor protection in Canada and is pursuing Chapter 15 bankruptcy protection in the U.S. months after the Nasdaq warned that its shares had dropped below the minimum price required to maintain a listing.

In Canada, IMV has filed for protection under the Companies’ Creditors Arrangement Act, or CCAA, which allows companies with more than $5 million in debt to engage in broad financial restructuring without filing for bankruptcy. Chapter 15 bankruptcy in the U.S. allows foreign companies with significant business interests in the country to have some parts of their insolvency proceedings overseen by American courts.

Founded in 2000, IMV was developing “a new class of targeted cancer immunotherapies”: time-released vaccines. In December, the company said it had received promising results from a Stage 2 clinical trial and was planning to start two Stage 1 trials this year.

“The decision to initiate CCAA proceedings was made keeping in mind the interest of all of our stakeholders and, in our view, was the best available option amidst a difficult market,” said IMV Chief Executive Andrew Hall in a statement.

“I sincerely regret the impact the restructuring of our business will have on our valued stakeholders. This has been an incredibly difficult decision, but a necessary one to ensure the best outcome for our promising technology and stakeholders.”

Spun out of research conducted at Dalhousie University, IMV was once the leading life sciences company in the region. It was the first company to raise money from the now defunct First Angel Network, and FAN Co-Founder Brian Lowe  took an executive position, steering the company through the early years of its growth. IMV listed on the TSX Venture exchange through a reverse takeover in 2014, and its shares began trading on the Nasdaq in 2018. 

By April 2021, the company had a market capitalization of C$238 million, but its stock has plunged in the past two years. According to Google, it's market cap is now C$13 million. 

In March of this year, the Nasdaq gave IMV executives until September to bring their shares back into compliance with the exchange’s US$1.00 minimum bid price, after shares fell to a low of 49 cents earlier that month. Trading of IMV’s shares is currently halted, but on Friday they closed at about 82 cents.

The warning came just four days after one of IMV’s high-profile investors departed its board. Shermaine Tilley, who was appointed to the board in 2016 after her Montreal-based CTI Life Sciences Fund backed IMV, cited policy changes at CTI as her reason for leaving the board.

Three months earlier, IMV had also issued an additional $9 million worth of shares and warrants. And last June, the company borrowed $10 million from Connecticut life sciences lender Horizon Technology Finance Corporation.

In IMV's year-end financial statement, auditor PWC warned there was “substantial doubt” about its status as a going concern, with IMV management citing an inability to raise enough capital to keep up with operating costs, including research and development work, as one reason for the grim financial news.

“The early Phase 2B clinical data for (bladder cancer drug) MVP-S is compelling,” said CEO Hall, who was appointed at the start of 2022, in IMV’s fourth quarter earnings announcement. “The market headwinds limiting available capital are, however, very real.”

In total, IMV lost almost US$38 million last year, bringing in just $329,000 of revenue against research and development costs of about US$23 million and general and administrative costs of nearly US$17 million.

As of Dec. 31, the company had just over US$31 million of total assets, including US$21 million cash, but US$9 million of outstanding accounts payable and US$27.4 million of long-term debt.