DermTech Files for Bankruptcy to Restructure Debt and Sell Assets

San Diego-based DermTech, which is recognized for its noninvasive skin cancer detection decal, has filed for Chapter 11 bankruptcy protection in Delaware in order to restructure its debt and liquidate its assets. A genomic approach to skin cancer detection was developed by the company, which went public in 2019. This approach involves the use of a smart sticker that captures samples from moles or dark skin patches without the need for a scalpel. The test has not received certification from the US Food and Drug Administration, despite the fact that it has been covered by insurance, including Medicare. Over the past year, DermTech encountered financial challenges that necessitated leadership changes and numerous redundancies. 

The organization's workforce was reduced by half to approximately 75 employees during the most recent round in April. DermTech recently submitted documents to the Securities and Exchange Commission that indicated it would reduce its personnel by 20%, or 15 employees, with the potential for additional reductions. As of April 30, DermTech reported debts of $63 million and assets of approximately $98 million. The company's most significant financial obligation is a $1.32 million lease commitment to Kilroy Realty LP. DermTech's most recent quarterly report underscored the pressing necessity for additional capital to sustain operations. DermTech requested the assistance of financial firm TD Cowen in order to investigate strategic alternatives, such as prospective mergers and asset sales. 

Become a Subscriber

Please purchase a subscription to continue reading this article.

Subscribe Now

Read more