Starpax Biopharma Converts to CCAA Amid Cash Burn and Failed Fundraising

Starpax Biopharma Inc., a Montreal-based biotech company founded in 2017 by entrepreneur Michel Gareau, obtained protection under the Companies’ Creditors Arrangement Act on September 12, 2025, converting from NOI proceedings it had commenced in August.

The company was created to commercialize cancer-treatment technology licensed from Polytechnique Montréal. Its platform combines “Magnetodrones,” engineered bacteria designed to carry cancer drugs directly into tumours, with “PolarTrak,” a device that uses a weak magnetic field to hold and guide the bacteria inside the tumour. To support this strategy, Starpax invested in a 27,000-sq.-ft. facility and built a portfolio of 57 patents.

Heavy infrastructure spending, construction overruns, and delays in clinical trials, combined with unsuccessful fundraising efforts, left the company without revenues and mounting losses. Since inception, Starpax has raised more than $80 million but now reports an accumulated deficit exceeding $50 million, supplier arrears of $7.4 million, and secured debt of $9.3 million to Investissement Québec and $1.9 million to the federal agency DEC. The situation forced the company to cease operations and lay off 50 employees in February 2025.

As part of the transition to CCAA, Investissement Québec, which is also a shareholder, has agreed to provide $2 million of interim financing at 15% interest to fund a monitor-led stabilization and sale or investment process. The monitor is expected to run a structured process aimed at salvaging value from the company’s intellectual property and development platform.

Raymond Chabot Inc. is the monitor. Sylvestre Avocats is acting for the company, while Borden Ladner Gervais LLP is representing Investissement Québec.