Elona Biotechnologies Inc., which has been struggling to repay the city of Greenwood for more than $8 million in economic development loans and incentives, says it has solution to its financial problems.
Elona announced Wednesday that it has reached an agreement under which the company will be acquired by a group of private investors. It did not disclose the names of the investors or the amount of financing.
"While terms of the transaction are confidential, Elona will receive sufficient funds to correct its default situation with the city of Greenwood, hire management and scientific talent to move the company forward, and proceed with clinical trials to support the registration of its generic human insulin under development for the treatment of diabetes," the company said in a prepared statement.
The company told Greenwood officials of its financial troubles in late January. That information prompted the Greenwood Redevelopment Commission to vote to declare Elona in default on $8.4 million worth of economic development incentives the city approved for the company in 2010.
The city loaned $6.4 million to help Elona build a new 50,000-square-foot, $28 million insulin production plant in Greenwood and hire 70 workers. The city also gave Elona $1.5 million to help it win approval for its insulin from the U.S. Food and Drug Administration and $500,000 for equipment.
Elona said it would use the new invesment to finish its headquarters and hire management and scientific talent. An executive team of pharmaceutical industry veterans with extensive experience will join Elona as either staff or consultants, the company said.
Elona was seen as a rising star, and Gov. Mike Pence even visited the company in March 2012 as part of his “jobs tour,” which was a key element of his gubernatorial campaign.
The company was founded by a former Eli Lilly and Co. scientist and has made its business doing contract drug manufacturing for other firms.
But its growth plans hinge on making a generic version of insulin, something that was not allowed in the United States until the 2010 passage of the Patient Protection & Affordable Care Act.