Worcester med device firm files for bankruptcy
A medical device manufacturer in Worcester that had been developing a non-invasive glucometer for diabetes patients has filed for bankruptcy.
Grove Instruments Inc., which is privately held, filed for Chapter 7 liquidation Wednesday in U.S. District Court in Worcester. In its filing, the company said it has more than 50 creditors and between $1 million and $10 million in liabilities, with only $50,000 to $100,000 in assets.
Just six months ago, Grove announced it had reached a landmark clinical milestone in developing its glucometer, which it called the “last hurdle” before going to market with the product, critical for diabetes patients in monitoring their blood-sugar levels.
Since December 2011, the company had secured more than $9 million in financing and was awarded both U.S. and Chinese patents for its product. It has a board of five scientific advisors, who include Nobel laureate Dr. Craig Mello, as well as Drs. David Harlan and J. Paul Lock, both professors at the University of Massachusetts Medical School in Worcester. All three are also listed as creditors.
In a letter to investors dated Wednesday, Richard Burtt, the company’s chairman and acting CEO, said Grove decided to cease operations and file Chapter 7 “regrettably and unfortunately,” after it failed to secure necessary financing to continue operations.
Over the past 12 years, Grove says it has received about $7.8 million in grants for development of the glucometer from such agencies as the National Institutes of Health and the Internal Revenue Service. The IRS is also listed as a creditor. In addition, the Massachusetts Life Sciences Center (MLSC), which provided the company up to $750,000 in loans in 2011, is listed as a creditor. When it announced the loan, the MLSC called Grove’s device a “truly disruptive” product that could “displace all current devices for home and point-of-care glucose monitoring.”
Angus McQuilken, the MLSC’s vice president for communications and marketing, said Grove owes the agency more than $1 million, which includes principal and interest on the loan. McQuilken said Grove and the MLSC were engaged in “ongoing communication” about discussing how to pay back the loan at the time of the bankruptcy filing.
The case has been scheduled for a creditors hearing May 21 before Judge Melvin S. Hoffman.
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