Synthego Chapter 11: Perceptive Takes CRISPR Assets in $85M Credit Bid, Creditors at 4.4%

Synthego Corporation, the Redwood City CRISPR tooling company founded by two former SpaceX engineers, exited chapter 11 through a 92-day liquidating plan that transferred substantially all of its assets to secured lender Perceptive Advisors in a credit-bid 363 sale. Ten months after the plan went effective on September 5, 2025, the estate — now renamed Shapauste, Inc. — had made no distributions to creditors as of the quarter ended March 31, 2026 and remains in claims reconciliation, with its objection deadline extended to August 31, 2026.

The company filed for chapter 11 on May 5, 2025 in the U.S. Bankruptcy Court for the District of Delaware (Case No. 25-10823), before Judge Mary F. Walrath. It came to court after raising more than $450 million from investors including Peter Thiel's Founders Fund, 8VC, and Wellington Management — with Nobel laureate Jennifer Doudna among its early backers — yet never reached profitability. Synthego entered the case with $50 million to $100 million in assets against $100 million to $500 million in liabilities, and the chapter 11 was structured from day one as a sale to its prepetition lender rather than an operating reorganization.

Debtor(s)	Synthego Corporation (n/k/a Shapauste, Inc.)
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	25-10823
Judge	Hon. Mary F. Walrath
Petition Date	May 5, 2025
Plan Type	Combined plan of liquidation and disclosure statement
Prepetition Secured Debt	~$73.9 million (Perceptive credit facility)
DIP Facility	$25 million ($15M new money + $10M roll-up; $5M interim draw)
Stalking Horse / Buyer	Perceptive Credit Holdings III, LP (credit bid)
Sale Order	June 26, 2025
Sale Closing	July 18, 2025
Confirmation Date	August 5, 2025
Effective Date	September 5, 2025
Claims Agent	Epiq Corporate Restructuring, LLC

Research Synthego Chapter 11 with ElevenFlo

View case record

From SpaceX to CRISPR Tooling

Synthego was founded in 2012 by brothers Paul and Michael Dabrowski, both former SpaceX engineers, who applied automation and software principles to genome engineering rather than coming from a genetics background. Paul Dabrowski had served as Lead Digital Designer at SpaceX, and the brothers started the company in Redwood City, California with $250,000 in initial capital and the goal of helping scientists automate research workflows. By the petition date the business employed about 150 people.

The company's core product was synthetic guide RNA (sgRNA), the targeting molecule that directs the CRISPR-Cas9 enzyme to a specific DNA sequence, sold alongside CRISPR nucleases, enzymes, and related bioinformatics and regulatory-support services. The first-day record describes a customer base of roughly 1,000 cell and gene therapy customers worldwide, spanning large pharmaceutical and biotech companies, smaller biotechs, and academic medical centers. The standardized, quality-controlled products replaced the variable in-house or academic guide-RNA synthesis researchers had previously relied on, an input that matters to gene-therapy development because guide-RNA quality affects editing efficiency and off-target effects.

Synthego opened its first Redwood City facility in 2016 and later added an 18,000 square-foot GMP manufacturing facility in 2023 capable of producing clinical-grade guide RNA under current Good Manufacturing Practices. That manufacturing capability, and the guide-RNA IP behind it, was the asset base that the eventual credit-bid sale was built to preserve.

Fundraising History and the Shift to Debt

Synthego's distress traces directly to a capital structure that moved from venture equity to secured debt as the company kept funding growth ahead of profitability. The disclosure statement's corporate history lays out a long equity history: seed financing, an $8.29 million Series A, a $42 million Series B, a $110 million Series C, a $100 million Series D, and a $196 million Series E. That equity base — well over $450 million across rounds — was followed by roughly $35 million of convertible notes in 2023–2024 and $97 million of non-convertible notes in 2024–2025 as the company turned to debt.

The equity rounds drew a roster of Silicon Valley investors. The Series B was led by 8VC and notably included Jennifer Doudna, the UC Berkeley professor who co-discovered CRISPR-Cas9 and won the 2020 Nobel Prize in Chemistry. Peter Thiel's Founders Fund led the $110 million Series C in 2018, and Wellington Management, RA Capital Management, and 8VC anchored the $100 million Series D in August 2020.

Round	Date	Amount	Lead Investor(s)
Series A	August 2016	$8.29 million	Initial investors
Series B	2017	$42 million	8VC (Jennifer Doudna participates)
Series C	2018	$110 million	Founders Fund (Peter Thiel)
Series D	August 2020	$100 million	Wellington Management, RA Capital, 8VC
Series E	—	$196 million	—
Convertible notes	2023–2024	~$35 million	—
Non-convertible notes	2024–2025	~$97 million	—

The shift from equity to debt reshaped the balance sheet that Synthego carried into bankruptcy. Unlike equity, the notes and the secured credit facility provided by Perceptive Credit Holdings III, LP created fixed obligations that had to be serviced regardless of operating performance, and by the end of 2023 interest expenses had expanded more than tenfold compared with 2020–2021 levels. The final DIP order records that at least $73,937,415.50 of principal was outstanding under the prepetition Perceptive facility as of the petition date — the secured position that would become the fulcrum of the entire case. There was no official committee of unsecured creditors; the U.S. Trustee filed a statement on May 16, 2025 reporting that no committee had been appointed.

Margin Compression and the Path to Filing

Synthego experienced revenue growth between 2020 and 2023, but the expansion required heavy spending on manufacturing capacity, research and development, and commercial infrastructure, and costs outpaced the company's ability to reach profitability. In 2024 the company spun out its engineered-cell business — identified in the bankruptcy as Editco Bio, Inc. — to narrow its focus and reduce cash burn, but it remained cash-flow negative into early 2025.

The CRO declaration framed the immediate liquidity problem in stark terms. Management stated that Synthego had never reached profitability and could not generate enough cash to service its debt even after the earlier capital raises and the engineered-cell divestiture. Over the 13 weeks following the petition, the company projected roughly $5 million of operating losses plus another $7.5 million of non-operating and restructuring costs, and it needed DIP financing and the use of cash collateral because it could not otherwise fund payroll, vendors, and a sale process. The same declaration said the company intended to file a liquidating chapter 11 plan within 21 days of filing.

The collapse coincided with a broader retreat from CRISPR-focused companies. More than a decade after the CRISPR-Cas9 discovery, commercial success had not matched the scientific breakthroughs: venture funding contracted, pharmaceutical companies cut research spending, and even successful players reduced headcount, with CRISPR Therapeutics laying off roughly 50 employees just weeks before the FDA approved the first CRISPR-based treatment. Both effects hit Synthego, whose customers were the drug developers and research institutions pulling back on spending. Synthego's largest unsecured claims reflected its venture history, led by Wellington Hadley Harbor Master Investors at roughly $51 million and 8VC funds at a combined roughly $52 million, while Perceptive held the secured prepetition and DIP positions.

DIP Financing and the U.S. Trustee Objection

The debtor-in-possession financing came from Perceptive, the prepetition secured lender, and tied financing, adequate protection, and the lender-led sale path into a single structure. The final DIP order, entered June 3, 2025, approved a $25 million package consisting of $15 million of new-money DIP loans and a $10 million roll-up of prepetition debt, after the interim order entered May 9 authorized an initial $5 million draw. The order granted priming liens and superpriority status subject to a carve-out and preserved the DIP and prepetition secured parties' right to credit bid up to the full amount of their obligations.

Term	Detail
DIP lender	Perceptive Credit Holdings III, LP
Total facility	$25 million
New money	$15 million
Roll-up	$10 million (reduced from a proposed $37.5 million)
Interim draw	$5 million
Liens / priority	Priming liens, superpriority, subject to carve-out
Credit bid	Rights preserved up to full DIP and prepetition obligations

The DIP terms produced the case's principal contested matter. On May 29, 2025, the U.S. Trustee objected to the facility as not "fair or reasonable," singling out the 15.8% floating interest rate and $2,625,000 of combined fees — a $525,000 closing fee plus a $2,100,000 exit fee, equal to roughly 17.5% of the $15 million of new money. The objection also challenged the originally proposed $37.5 million roll-up and argued that Perceptive's dual role as both prepetition lender and stalking-horse bidder undercut its claim to good-faith protection under section 364(e).

The debtor's June 2 reply defended the pricing as PIK-accrued rather than cash-pay and consistent with comparable Delaware cases, and noted that no economic stakeholder or creditor had objected. The dispute was resolved in the final order: the DIP secured parties agreed to forego any further roll-up, capping it at the $10 million already advanced and leaving the balance of the prepetition loans as prepetition secured debt, and the debtor represented that the U.S. Trustee's remaining issues had been resolved.

Credit-Bid Sale to Perceptive

The case ran on a parallel sale track from the first week. Synthego filed its sale motion on May 6, proposing a stalking-horse sale to Perceptive in which the purchase price consisted primarily of a credit bid covering the full DIP obligations plus the full prepetition obligations outstanding at closing minus $1 million, together with assumed liabilities and required funding of excluded cash at closing. Bloomberg reported the credit bid as valued at up to $85 million. The motion set bid protections of a termination fee equal to 1.5% of the credit bid and expense reimbursement capped at $1 million, with an outside date of July 18, 2025. Raymond James & Associates, Inc. served as investment banker and marketed the assets against the stalking-horse floor.

The court entered an order approving bidding procedures on May 29, but the process drew no qualifying topping bid. The auction was cancelled, Perceptive was designated the successful bidder, and the court entered the sale order on June 26, approving the transfer free and clear of liens, claims, and encumbrances except permitted liens and assumed liabilities. The sale closed on July 18, 2025 to Perceptive Credit Holdings III, LP or its designee.

In connection with the sale, the debtor circulated a potential assumption-and-assignment notice covering roughly 182 executory contracts and unexpired leases, with an objection deadline of June 20, 2025. Most listed contracts carried no cure amount; the largest scheduled cure was $492,600 for Editco Bio, Inc., the engineered-cell business Synthego had spun out, followed by smaller figures such as $21,399 for Poseida Therapeutics, Inc.

The buyer, Perceptive Advisors, is a life sciences-focused investment manager founded in 1999 and based in New York. As prepetition lender, DIP provider, and stalking-horse bidder, Perceptive used the credit-bid mechanism to convert its secured debt into ownership of the assets without deploying new capital beyond the DIP financing. The company announced the close on July 18, with operations, the existing workforce, and the Synthego brand continuing in Redwood City under new ownership while the debtor entity wound down.

Liquidating Plan and GUC Fund Recoveries

Synthego moved from the lender-led sale into a combined plan and disclosure statement, the streamlined vehicle common in liquidating chapter 11 cases where the primary asset sale is already complete. The debtor filed its original combined plan and disclosure statement on May 29, a first amended version on June 24, and obtained conditional disclosure-statement approval on June 26. Judge Walrath entered the confirmation order on August 5, 2025 — exactly 92 days after the petition — confirming a plan of liquidation administered by a post-effective-date debtor representative rather than an operating reorganization.

The confirmed treatment turned on the lenders' concessions. Under the first amended combined plan and disclosure statement, Class 2 prepetition secured claims were largely satisfied through the credit-bid sale, with the remaining stub claim entitled to residual collateral proceeds and specified cash after priority payments, for an estimated recovery of 98.6% net of the GUC fund and the $1 million stub. Class 4 general unsecured claims were impaired; if the class accepted, holders would receive a pro rata share of a GUC fund and available cash, funded in part by distributions the prepetition lenders would otherwise have received on their stub claim, for an estimated recovery of 4.4% plus any net value from specified litigation.

Those figures were a marked improvement over the case's opening posture. The liquidation analysis filed with the original combined plan projected Class 2 recoveries of just 34.1% to 11.0% across high, medium, and low scenarios and 0.0% for Class 4 and lower classes in every scenario — a contrast that shows how much the confirmed recoveries depended on the post-sale distribution structure and the lenders' GUC-fund concessions. The plan became effective on September 5, 2025, and the debtor's caption was changed to Shapauste, Inc. f/k/a Synthego Corporation on September 9.

Professional Retentions and $3.6 Million in Fees

The court approved the debtors' core professional team effective as of the petition date: Pachulski Stang Ziehl & Jones LLP as chapter 11 counsel, Raymond James & Associates, Inc. as investment banker, and Paladin Management Group, LLC to supply Chief Restructuring Officer Allen Soong. Fenwick & West LLP was retained as special corporate counsel, and Epiq Corporate Restructuring, LLC served as both claims and noticing agent and administrative advisor. The estate also obtained authority to pay ordinary course professionals.

The court entered an omnibus final fee order on November 3, 2025. The fullest cumulative picture appears in the post-confirmation reports, which show $3,572,719 of professional-fee payments through the effective date and into the wind-down — $1,302,045 to Raymond James, $1,263,223 to Pachulski Stang, $643,830 to Paladin, $237,335 to Epiq, and $126,286 to Fenwick & West.

Claims Reconciliation and Post-Confirmation Status

The Synthego estate remains an open claims-reconciliation matter, with no plan distributions made as of the quarter ended March 31, 2026. The debtor filed its first substantive omnibus objection on August 8, 2025, three days after the confirmation order, targeting reduced, no-liability, amended or superseded, and reclassified claims. The resulting order sustained the objection as to two schedules and continued the hearing on Thomas Scientific, LLC's Claim No. 10055, with examples including disallowance of an Eaton Corporation claim as duplicative, disallowance of a Pacific Biolabs claim as superseded, and reclassification of a Genie Scientific claim from priority to general unsecured. Individual claimants have since dropped off the register, including the Massachusetts Department of Revenue's withdrawal of Claim No. 10069 in December 2025.

Reconciliation has driven repeated deadline extensions rather than distributions. The post-effective-date debtor obtained a first extension of the claims-objection deadline in March 2026, then a second extension to August 31, 2026 entered June 12, 2026. The supporting motion stated that 111 claims have been filed, that the review of unresolved claims and the debtor's books and records is "largely complete," and that the extension was sought to preserve the estate's objection rights while settlements are negotiated.

The post-confirmation reports confirm the estate has not begun distributing. The report for the quarter ended December 31, 2025 showed no distributions to administrative, secured, priority, or general unsecured claimants and cumulative cash disbursements of $88,796 since the effective date. The report for the quarter ended March 31, 2026 again reported no distributions, cumulative disbursements of $370,371, and anticipated plan payments of $2 million for administrative claims, $1,727,000 for priority claims, and $200,000 for general unsecured claims, with no final-decree date set.

Key Timeline

Date	Event
2012	Synthego founded by Paul and Michael Dabrowski
August 2016	First Redwood City facility opens; $8.29M Series A raised
2017	Series B: $42 million led by 8VC; Jennifer Doudna invests
2018	Series C: $110 million led by Founders Fund
August 2020	Series D: $100 million from Wellington, RA Capital, 8VC
2023	18,000 sq ft GMP manufacturing facility opens
2024	Engineered-cell business (Editco Bio) sold; company remains cash-flow negative
May 5, 2025	Chapter 11 petition filed (Case No. 25-10823)
May 6, 2025	Sale motion filed
May 9, 2025	Interim DIP order entered
May 16, 2025	U.S. Trustee reports no creditors' committee
May 29, 2025	Bidding-procedures order entered; original combined plan and DS filed; U.S. Trustee objects to DIP
June 3, 2025	Final DIP order entered ($25M facility)
June 24, 2025	First amended combined plan and DS filed
June 26, 2025	Conditional DS approval and sale order entered; auction cancelled
July 18, 2025	Sale to Perceptive closes
August 5, 2025	Plan of liquidation confirmed (92 days after petition)
September 5, 2025	Plan effective date
September 9, 2025	Caption changed to Shapauste, Inc.
June 12, 2026	Claims-objection deadline extended to August 31, 2026

Frequently Asked Questions

Who bought Synthego out of bankruptcy?

Perceptive Advisors, through its affiliate Perceptive Credit Holdings III, LP, acquired substantially all of Synthego's assets through a credit-bid 363 sale that Bloomberg reported as valued at up to $85 million. Perceptive was also the company's prepetition secured lender and DIP financing provider, and the auction drew no competing bid.

What caused Synthego's bankruptcy?

Management stated the company never reached profitability and could not generate enough cash to service its debt, even after raising more than $450 million and selling its engineered-cell business in 2024. A shift from equity to secured debt added fixed interest obligations that expanded more than tenfold between 2020 and 2023, and a broad retreat from CRISPR-focused companies cut demand from the drug developers and research institutions Synthego supplied.

What did creditors recover under the plan?

The confirmed plan estimated a 98.6% recovery for Class 2 prepetition secured claims and 4.4% for Class 4 general unsecured claims, well above the original liquidation analysis that projected 0.0% for general unsecured creditors. As of the post-confirmation report for the quarter ended March 31, 2026, no plan distributions had yet been made.

How long did the case take?

The plan was confirmed on August 5, 2025, exactly 92 days after the May 5 petition, and the sale to Perceptive closed on July 18. The plan became effective on September 5, 2025, but the estate remains in claims reconciliation, with no distributions made as of the quarter ended March 31, 2026.

Does Synthego still operate?

Yes. Operations, the workforce, and the Synthego brand continue in Redwood City under Perceptive's ownership after the July 18, 2025 closing. In January 2026 the company announced entry into molecular biology and clinical diagnostic reagents through a collaboration with biotechrabbit GmbH. The former debtor entity was renamed Shapauste, Inc. and is winding down through the liquidating plan.

Who is the claims agent for Synthego?

Epiq Corporate Restructuring, LLC serves as the claims and noticing agent and administrative advisor. The estate's first omnibus objection and subsequent extension motions run through Epiq's register, and the claims-objection deadline currently runs to August 31, 2026.

Related ElevenFlo coverage: Accelerate Diagnostics, whose diagnostics business ended in a 97-day credit-bid sale; Acorda Therapeutics, a $185 million stalking-horse 363 sale and liquidation plan; AmplifyBio, a cell-therapy CDMO liquidation; and Apple Tree Life Sciences, a biotech venture fund's chapter 11.