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Humanigen is running out of options as talks over a reverse merger have collapsed and, with efforts to find another deal or raise funding failing, the biotech is considering filing for bankruptcy in the third quarter, FierceBiotech.com reported. The New Jersey-based biotech has been on the ropes since its anti-human GM-CSF monoclonal antibody failed to improve outcomes in hospitalized COVID-19 patients last year. Humanigen was already reeling from the FDA’s rejection of its request for emergency use authorization and the stock has stayed firmly rooted in penny stock territory ever since the late-phase flop. By the end of March, Humanigen was down to its last $3.1 million but a non-binding letter of intent with a private biopharma company presented an exit strategy. Humanigen was in exclusive negotiations over a stock-for-stock deal and seeking external financing in connection with the reverse merger.

Foxo Technologies, a Minneapolis-based biotech startup, is facing the prospect of bankruptcy if it cannot quickly secure new financing, the Minneapolis Star Tribune reported. Without the financing, "it will be unable to fund its operations," the company said in a Friday filing with the U.S. Securities and Exchange Commission. Besides bankruptcy, the company, which went public in September 2022, will look at dissolving or liquidating assets should need be, the filing said. Foxo also is reducing staff from 22 to 15 employees to cut operating expenses, the filing said. Foxo developed a saliva test that could be used to identify biomarkers to measure longevity. The concept was to market the data to life insurance companies. Foxo reported in May that first quarter revenue was $13,000, down from $40,000 in the same quarter the year before. Its net loss was $7.6 million, compared with a net loss of $12.3 million. Foxo went public last September in a merger with a Texas-based special purpose acquisition company. On its first day of trading the company's stock opened at $9.15 per share. On Friday Foxo's stock closed at 15 cents per share. Two months after going public, Foxo ousted CEO Jon Sabes and his brother, Chief Operating Officer Steven Sabes. In March, Foxo disclosed that it was under SEC investigation. The agency was seeking documents related to Sabes' exit from the company.

Residents, nurses and local politicians gathered at a town hall meeting in Hollister, Calif., to voice their concerns about the future of Hazel Hawkins Memorial Hospital after the San Benito Health Care District's recent chapter 9 bankruptcy filing, Becker's Hospital Review reported. Members of the California Nurses Association recently voted "no confidence" in both the Hazel Hawkins board and the administration and argued that the bankruptcy filing was a potentially catastrophic and unnecessary step in resolving the hospital's financial issues, according to the report. During the July 6 town hall meeting, Mike Rabourn, research lead for the California Nurses Association, argued that the financial health of the healthcare district is not as dire as it seems. "Ultimately, what we found, in spite of all their tales of woe, when you look under the hood, the district is actually not doing so bad, especially in the last six months," Mr. Rabourn said, according to benitolink.com. "As of May, it’s actually in quite a strong financial position according to their own financial reports. I think everybody is surprised that they are so aggressively pursuing this bankruptcy process when they’ve actually engineered quite a financial recovery since the fiscal emergency." Mr. Rabourn argued that the hospital district is not financially insolvent — despite projections that it will run out of cash by November or December 2024 — and that it currently has more than 35 days cash on hand and recorded about $2 million in net income over the past 11 months.

The Department of Justice announced Wednesday that it has recently charged 78 people with $2.5 billion in separate health-care fraud and opioid abuse schemes, CNBC.com reported. The defendants allegedly defrauded programs used to take care of elderly and disabled people, and in some cases used the ill-gotten money to buy exotic cars, jewelry, and yachts, the DOJ said. Among those charged are 11 defendants accused of submitting $2 billion in fraudulent claims through telemedicine, as well as 10 defendants charged in connection with fraudulent prescription drug claims. In all, prosecutors filed charges against people in 16 states in cases that were lodged or unsealed in the past two weeks as part of the coordinated crackdown. The defendants include “physicians and other licensed medical professionals who lined their own pockets, including doctors who allegedly put their patients at risk by illegally providing them with opioids they did not need,” the DOJ said in a press release.

A bankruptcy judge has ruled to allow a Berkshire Hathaway–affiliated defunct talcum powder supplier to remain in bankruptcy to address thousands of personal injury cases, rejecting a request from a state court-appointed receiver to throw the case out of chapter 11, WSJ Pro Bankruptcy reported. Judge Michael Kaplan of the U.S. Bankruptcy Court in New Jersey said in his ruling Tuesday that the board of directors of former talc supplier Whittaker, Clark & Daniels had the authority to place the company under chapter 11 protection in April. The judge declined to dismiss the case requested by the receiver appointed by a South Carolina trial judge in March. The receiver, Peter Protopapas, was appointed after Whittaker Clark was hit by a $29 million verdict and found to be on the verge of insolvency. He argued in bankruptcy court that the appointment of the receiver by the state court stripped the company board’s authority to file for bankruptcy. Judge Kaplan said in his ruling that he can’t give weight to that argument, which he said was based on the receiver’s “mistaken understanding” of the receivership order. “This court will not, and cannot, give force to any subjective belief that the receivership order achieved something beyond the powers outlined therein — especially when that expansive interpretation would contravene case law and the Bankruptcy Code,” Judge Kaplan wrote in Tuesday’s ruling.