Navidea Biopharmaceuticals: Lymphoseek Developer Files Subchapter V After RA Trial Failure

Navidea Biopharmaceuticals, Inc. filed for chapter 11 on October 1, 2025. The Columbus-based company developed the first new lymph node mapping agent approved by the FDA in more than 30 years, sold Lymphoseek to Cardinal Health for $83 million in 2017, and later faced years of litigation, a failed Phase III clinical trial, and governance disputes before the chapter 11 filing. Filing under Subchapter V with approximately $1.2 million in assets against $12.9 million in liabilities, Navidea is pursuing a sale process while its largest creditor—board member John Kimball Scott Jr., who is owed $7.8 million in prepetition secured debt—serves as the DIP lender providing $1.6 million in bankruptcy financing, a relationship the Subchapter V Trustee is investigating. The case aligns with the biotech sector's bankruptcy increase, with 27 filings in 2023-2024 amid tighter capital conditions and R&D failures, and a broader wave that pushed corporate bankruptcies to a 15-year high in 2025.

Company Background and History

Navidea Biopharmaceuticals traces its origins to 1983, when the company was incorporated as Neoprobe Corporation in Dublin, Ohio. The company changed its name to Navidea Biopharmaceuticals, Inc. in January 2012, reflecting its evolution into a precision medicine company focused on the development and commercialization of diagnostic radiopharmaceuticals and radiopharmaceutical therapeutics. The company's headquarters remain in the Columbus, Ohio metropolitan area at 4100 Horizons Drive, Suite 205.

Navidea's technological foundation rests on its proprietary Manocept platform, which enables the development of purpose-built molecules for diagnostic accuracy. The platform targets the CD206 mannose receptor found on activated macrophages—immune cells that contribute to tumor immunosuppression, angiogenesis, metastasis, and relapse when present as tumor-associated macrophages (TAMs). Research published in Science Translational Medicine demonstrated that activating CD206 on TAMs can reprogram them from a tumor-promoting to an antitumor phenotype. The technology supports multiple detection modalities including SPECT, PET, intraoperative, and optical-fluorescence imaging, with meta-analysis confirming tilmanocept's effectiveness for sentinel node mapping in breast cancer, melanoma, and head and neck cancer.

Macrophage Therapeutics Subsidiary.

In December 2014, Navidea formed Macrophage Therapeutics as a business unit to explore therapeutic applications of the Manocept platform. In January 2015, the unit was incorporated as Macrophage Therapeutics, Inc. (MT), initially as a wholly-owned subsidiary. The subsidiary was expected to achieve an enterprise valuation of $500 million based on its therapeutic pipeline.

Macrophage Therapeutics developed two lead immunoconstructs:

Lymphoseek: The Flagship Product.

Navidea's Lymphoseek (technetium Tc 99m tilmanocept) is a radiopharmaceutical diagnostic imaging agent for lymph node localization. The product works by binding to CD206 mannose receptors on macrophages and dendritic cells, accumulating in lymphatic tissue within minutes and localizing tumor-draining lymph nodes.

Lymphoseek Regulatory History:

The 2013 FDA approval made Lymphoseek the first new drug approved for lymph node mapping in more than 30 years. The product gained additional regulatory milestones, including a 2021 FDA approval for pediatric patients with melanoma, rhabdomyosarcoma, and other solid tumors. Clinical studies demonstrated a 96% lymph node detection rate in pediatric patients, with an average of three lymph nodes detected per patient. The technology provided receptor-targeted mapping for sentinel lymph node biopsy in breast cancer, melanoma, and other solid tumors. Lymphoseek operates in a sentinel node biopsy market projected to reach $1.1 billion by 2030, growing at 7% annually.

Path to Bankruptcy

The Cardinal Health Sale (2017).

Facing legal fees from ongoing litigation with Capital Royalty Partners and needing liquidity to pursue R&D operations, Navidea entered into an Asset Purchase Agreement with Cardinal Health 414, LLC in January 2017. The transaction closed on March 3, 2017.

Cardinal Health Transaction Terms:

Cardinal Health, which had served as Navidea's exclusive U.S. distributor for Lymphoseek, acquired the North American rights to the product. Under the agreement, Cardinal Health licensed back a portion of intellectual property to Navidea for development of new immunodiagnostic and immunotherapeutic products in North America. Navidea retained rights to produce and sell Lymphoseek under a different brand name outside North America.

The transaction included a five-year non-compete restriction in the field of lymphatic mapping, which expired in March 2022. The funds were intended to repay all outstanding CRG debt and accelerate development of Navidea's rheumatoid arthritis and cardiovascular pipeline.

However, subsequent management decisions affected the transaction's long-term value. Management elected to receive a lump-sum $17 million discounted cash flow payment in lieu of future royalties estimated at $165 million on future Lymphoseek sales. This provided immediate liquidity but eliminated the opportunity to benefit from Cardinal Health's subsequent commercial success—the company achieved an estimated $100 million in annual Lymphoseek sales by 2023.

Post-sale, Navidea shifted from a commercial-stage pharmaceutical company into a pre-revenue research and development entity focused on developing an Improved API distinct from the original process sold to Cardinal Health.

Capital Royalty Partners Litigation (2016-2023).

Navidea's financial distress predates the Cardinal Health sale and traces to its relationship with Capital Royalty Partners II, L.P. (CRG). In May 2015, CRG loaned Navidea approximately $50 million to fund continued Lymphoseek development. On April 7, 2016, CRG declared a technical (not monetary) default and filed suit in Texas state court.

CRG Litigation Timeline:

The December 2019 Ohio ruling found that CRG had collected more than $66 million, constituting excess recovery and breach of the Global Settlement Agreement—awarding Navidea $4,265,434 plus statutory interest. However, both appeals ultimately went against Navidea.

The December 2023 settlement was funded in part by John K. Scott Jr., who loaned the company $750,000 with a maturity date of April 10, 2025 specifically to fund the CRG settlement. Scott also restructured an existing note and forgave $100,000 in principal. As of September 30, 2023, the contingent liability for the CRG judgment and accrued interest stood at $2,711,806.

Michael Goldberg CEO Litigation (2019-2024).

The company faced litigation with former CEO Dr. Michael Goldberg, who served as director beginning November 2013 and CEO from September 2016 until his resignation in August 2018.

Central to CRG's original default declaration was Goldberg's involvement in the CRG loan execution. Following his resignation, Navidea and Goldberg entered a Separation Agreement providing that he would become CEO of subsidiary Macrophage Therapeutics, MT would redeem his preferred stock, he would receive super voting common stock equal to 5% of MT's outstanding shares, and he would receive 1,175,000 shares of Navidea common stock.

On February 11, 2019, Goldberg represented to the MT Board that he had—without board or shareholder approval—created a subsidiary of MT, transferred all MT assets into it, and issued himself stock in the new entity. The MT Board removed him as President and CEO on February 20, 2019.

Goldberg Litigation Rulings:

The litigation continued for nearly six years through lawsuits, countersuits, and discovery disputes.

NYSE Delisting and SEC Deregistration.

Navidea's financial condition led to its exit from public markets:

Capital Markets Exit Timeline:

The SEC deregistration suspended Navidea's obligation to file Forms 10-K, 10-Q, and 8-K immediately upon Form 15 filing. Management estimated the decision would save more than $2 million annually in reporting costs and allow focus on core business activities.

Failed Phase III Rheumatoid Arthritis Trial (July 2024).

Navidea invested millions of dollars in clinical trials for an imaging diagnostic related to rheumatoid arthritis. The NAV3-33 Phase III study (NCT05246280) enrolled 523 patients to confirm whether IV Lymphoseek imaging could predict clinical response in RA patients beginning anti-TNFa therapy.

NAV3-33 Trial Results:

The exploratory analysis completed July 2, 2024 showed that while IV Lymphoseek could reliably image macrophage activity in RA patients, it failed to accurately predict which patients would respond to anti-TNFa medication. CEO Michael Blue stated the company was "very surprised and disappointed" by the results.

Navidea immediately suspended all RA Trial activities and pivoted to focus on therapeutic assets. The trial failure removed the company's primary near-term revenue opportunity and represented a write-off of its R&D investment.

Governance disputes continued in parallel. A September 2024 Delaware Chancery lawsuit alleged that a director stacked the board with cronies and seized control of the company through "five years of extreme and unconscionable self-dealing," with the complaint alleging that 62% of Navidea equity ended up in the hands of a single stockholder-director. Former directors Agnieszka Winkler and Malcolm Witter were named in a shareholder class action filed in September 2024, with AIG initially rejecting D&O coverage claims before later reversing on defense costs. On August 15, 2025, John K. Scott Jr.—as sole remaining director—appointed an Independent Director (Edward Burr) to help guide restructuring efforts and provide independence with respect to certain business decisions.

Subchapter V Restructuring

Filing and First Day Relief.

Navidea filed for chapter 11 protection on October 1, 2025, electing to proceed under Subchapter V—a streamlined process for small businesses created by the Small Business Reorganization Act of 2019. The filing came amid a 32% increase in Subchapter V elections in 2024, with 2,381 small business filings—though the pace slowed after enhanced debt limits expired in June 2024. The case assignment went to Judge J. Kate Stickles, with David M. Klauder appointed as Subchapter V Trustee.

The First Day Declaration described failed clinical trials, global supply chain issues related to development of the Improved API in Switzerland, and threats of involuntary bankruptcy from creditors as the reasons for the filing. The bankruptcy petition indicated that funds would be available for distribution to unsecured creditors.

Cash Position at Filing:

The company's cash position—less than $16,000 in total cash at filing—required DIP financing.

Equity Structure and Scott Ownership.

The First Day Declaration disclosed Navidea's complex equity structure:

John Kimball Scott Jr.'s ownership stake:

• 54.92% of Common Stock
• 100% of Deferred Director Shares
• 100% of Scott Convertible Equity
• 23% of Warrants

Scott became a director of Navidea in 2021 and emerged as the sole remaining director by August 2025.

DIP Financing: Insider Relationship Under Scrutiny.

The DIP financing arrangement with John Kimball Scott Jr. is a central issue in the case. Scott, who is owed approximately $7.8 million in prepetition secured debt and serves on the board of directors, is providing the company's postpetition financing.

DIP Financing Terms:

Prepetition Secured Debt (Scott):

Harry Shualy, representing stockholders, objected to both the DIP financing and equity trading procedures. He filed a Motion to Dismiss the case, which was later withdrawn as part of a stipulation on November 7, 2025.

The Subchapter V Trustee is investigating claims related to the DIP Lender's prepetition debt.

Sale Process.

With reorganization options limited by the company's pre-revenue status and failed clinical program, Navidea is pursuing a sale process:

Sale Timeline:

SSG Advisors, LLC is serving as investment banker, marketing the company's assets including the Improved API technology, intellectual property, and tax attributes.

NOL Tax Asset Protection.

Navidea holds net operating losses that could provide value to an acquirer:

Tax Assets:

To protect these tax attributes, the company maintains a Section 382 Rights Agreement originally adopted April 7, 2022 and extended to April 7, 2027. The Rights Plan discourages acquisition of 4.99% or more of outstanding common stock, preventing an "ownership change" under Section 382 that would limit NOL utilization.

These tax attributes could be relevant to potential acquirers seeking to offset taxable income.

Key Assets Remaining.

Despite selling its North American Lymphoseek rights, Navidea retains:

1. Improved API - A proprietary active pharmaceutical ingredient distinct from the original process sold to Cardinal Health, developed over six years at a cost of approximately $4.1 million with an additional ~$400,000 needed to complete development including 24-month stability testing

2. Cardinal Health Executory Contracts - Ongoing relationship providing Cardinal Health access to Improved API supply from Corden pursuant to the January 2021 API Development Funding and Access Agreement

3. Corden Manufacturing Agreement - Manufacturing contract with Corden Pharma Switzerland, LLC for Improved API development and commercial supply

4. International Rights - Rights to produce and sell Lymphoseek (under different brand name) outside North America

5. Patent Portfolio - Multiple patents approved or in prosecution for pre-clinical therapeutic drugs

6. Subsidiary Interests - Wholly-owned subsidiaries Navidea Biopharmaceuticals Europe Limited and Navidea Biopharmaceuticals Limited, plus majority ownership of Macrophage Therapeutics, Inc.

Industry Context: Biotech Bankruptcy Wave

Navidea's filing occurs amid a broader wave of biotech sector distress that has pushed corporate bankruptcies to their highest level since 2010:

Biotech Bankruptcy Statistics:

BioSpace reports that interest rate increases have made capital raising more difficult for biotech companies. Labiotech's analysis noted that the spike in 2021 debt financings—a response to declining interest rates—has come due in an environment where refinancing is challenging or impossible. Industry experts describe it as "a terrible market to get financing," with companies "having no choice but to break the glass and push the bankruptcy button."

Notable 2024-2025 Biotech Bankruptcies:

Contributing Factors:

• Post-pandemic debt maturities from 2021 financing surge
• Higher interest rates constraining capital availability
• Clinical trial failures eliminating runway for pre-commercial companies
• Compressed valuations making equity raises dilutive or unavailable
• Partnering deals between pharma and biotech also down, limiting capital alternatives

Beyond chapter 11, experts note that many more biotechs pursue ABC (Assignment for Benefit of Creditors) proceedings or simply dissolve, as those processes are less expensive and quicker than formal bankruptcy.

Navidea reflects several of these pressures: a pre-revenue company that sold its commercial asset to fund R&D, experienced a clinical trial failure, and spent years in litigation.

Professional Retentions

Key Timeline

Frequently Asked Questions

What is Navidea Biopharmaceuticals?

Navidea Biopharmaceuticals is a Columbus, Ohio-based biopharmaceutical company focused on precision medicine through its Manocept platform, which targets the CD206 mannose receptor on activated macrophages. The company developed Lymphoseek, the first new lymph node mapping agent approved by the FDA in more than 30 years, which it sold to Cardinal Health in 2017 for approximately $83 million.

Why did Navidea file for bankruptcy?

The company cited failed clinical trials (particularly the July 2024 Phase III rheumatoid arthritis trial failure), global supply chain issues affecting development of its Improved API, years of costly litigation with Capital Royalty Partners and former CEO Michael Goldberg, and threats of involuntary bankruptcy filings from creditors. The company had only approximately $15,000 in total cash at the time of filing.

What happened to Lymphoseek?

Navidea sold the North American rights to Lymphoseek to Cardinal Health in March 2017 for approximately $83 million at closing, with potential contingent consideration of up to $227 million through 2026. Cardinal Health, which had been the exclusive U.S. distributor, licensed back certain IP rights for Navidea to develop new products. Management subsequently elected to receive a lump-sum $17 million payment in lieu of future royalties estimated at $165 million.

What is Subchapter V bankruptcy?

Subchapter V is a streamlined chapter 11 process for small businesses created by the Small Business Reorganization Act of 2019. It allows debtors to spread debt repayment over 3-5 years, imposes shorter deadlines (90 days for plan filing), appoints a Subchapter V Trustee to facilitate the process, and does not require payment of U.S. Trustee quarterly fees.

Who is the DIP lender and why is it contested?

John Kimball Scott Jr. is providing $1.6 million in DIP financing at 10% interest with a PIK structure. The relationship is contested because Scott owns 54.92% of Navidea's common stock, is owed approximately $7.8 million in prepetition secured debt, and serves on the company's board of directors, making him an insider lender. The Subchapter V Trustee is investigating claims related to his prepetition debt.

What is the Manocept platform?

The Manocept platform enables purpose-built molecules that target the CD206 mannose receptor on activated macrophages—immune cells implicated in cancer, autoimmune diseases, and CNS disorders. The platform supports SPECT, PET, intraoperative, and optical-fluorescence detection modalities for diagnostic and potential therapeutic applications.

What happened to the rheumatoid arthritis trial?

The NAV3-33 Phase III trial enrolled 523 patients to test whether IV Lymphoseek imaging could predict clinical response to anti-TNFa therapy in RA patients. The July 2, 2024 exploratory analysis showed that while imaging could reliably visualize macrophage activity, accuracy in predicting treatment response was consistently below 70%—far below the anticipated 90%. Navidea suspended all RA activities immediately.

Why was Navidea delisted from NYSE American?

NYSE Regulation commenced delisting proceedings in July 2023 after Navidea failed to demonstrate compliance with capital and equity requirements by the end of an 18-month compliance plan period. The company's appeal was denied, and trading was suspended in October 2023. Navidea subsequently filed Form 15 to deregister with the SEC entirely.

What are the company's NOL tax assets worth?

As of December 2024, Navidea had approximately $170-$180 million in U.S. federal net operating losses and approximately $9 million in R&D tax credits. These NOLs represent potential value to an acquirer, particularly profitable companies seeking to offset taxable income. The company maintains a Section 382 Rights Agreement to protect these assets.

What is the outlook for the bankruptcy case?

The company is pursuing a sale process with SSG Advisors as investment banker. Bid procedures were approved in December 2025. The Subchapter V Trustee is overseeing the process and investigating the insider DIP relationship. The case status centers on the sale process and any plan proposals tied to those assets.

Who is the claims agent for Navidea Biopharmaceuticals?

Epiq Corporate Restructuring, LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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