Lipella Pharmaceuticals, a biotechnology company in Pittsburgh’s Homewood neighborhood, filed for bankruptcy protection Monday following more than two decades of developing medications that never made it to market.
The drugmaker is winding down operations just 10 months after being delisted from the Nasdaq stock exchange, which choked off access to capital needed for further research, Lipella said in filings in U.S. Bankruptcy Court in Pittsburgh.
Lipella has just shy of $700,000 in debt, a majority of which is held by Boston-based law firm Sullivan and Worcester, the filings show. Lipella CEO Jonathan Kaufman is owed more than $200,000 in compensation, according to the filings.
The company has nearly $8 million in cash, intellectual property, laboratory equipment, medications and other assets, according to court documents.
Kaufman, who has a doctorate in biophysics from the University of Pennsylvania, founded the company in 2005 alongside urologist Dr. Michael Chancellor.
The company developed a medicinal mouthwash to treat ulcers and redness caused by oral lichen planus, an incurable inflammatory disease that effects more than 6 million Americans. In an early-stage clinical trial, patients saw significant relief and no major side effects.
The drug has also shown promise in treating chronic graft-versus-host-disease, a frequent complication of bone marrow transplants, as well as bladder irritation from hemorrhagic cystitis when given through a catheter.
“The goal here is to sell the company’s technology and hopefully find someone who will continue to develop it,” said Michael Shiner, the bankruptcy attorney hired by Lipella.
Details about the sale process are expected next week.
The company did not immediately return a request for comment.
Lipella tried to project stability after being booted from the Nasdaq in June, with Kaufman assuring shareholders in a press release the company was “financially sound” and had “sufficient capital to support ongoing development programs.”
Cracks in Lipella’s long-term plans were made obvious, however, in a recent U.S. Securities and Exchange Commission filing covering the third quarter of 2025.
By then, the company had a historical loss of more than $19 million and less than $2 million in cash on hand, raising what it called “substantial doubt” about its ability to go on.