Synova Healthcare Group Inc., a small women's health-care firm in Media, said today it has filed to reorganize its finances under Chapter 11 of the U.S. Bankruptcy Code.
Synova made news earlier this year when it bought a popular over-the-counter contraceptive, Today Sponge, made famous in a "Seinfeld" episode in the 1990s.
In a filing Tuesday in U.S. Bankruptcy Court in Delaware, Synova said it had assets of $21.3 million and debts of $26.8 million.
The company said its decision to reorganize under Chapter 11 was made "primarily to address Synova's liquidity and capital resources issues, which left Synova unable to continue to effectively operate its business." The company said its inability to get equity and debt capital "severely depleted its cash and other capital resources."
In July, Synova announced a new advertising campaign, new packaging for the sponge, and a new Web site. The company estimated it would spend $5 million to $6 million this year on magazine ads, and noted it had been working to let physicians and others know that the Sponge contraceptive was available again.
In 1995, with $25 million in sales and a dozen years on the market, the Today Sponge was withdrawn because of deficiencies at the manufacturing plant. The sponge's safety was never in question, but Wyeth, formerly American Home Products, quit making it rather than upgrade a factory cited by the Food and Drug Administration for various problems.
In 1998, Allendale Pharmaceuticals Inc. bought rights to the Today Sponge. In 2006, the sponge had just under $2 million in sales. In January this year, Synova Healthcare bought Allendale.
Synova, which is not profitable, reported revenue of $1.8 million in 2006.
For the three months ended Sept. 30, the company reported sales of $336,655, an operating loss of $3.51 million, and a net loss of less than $100,000.
Between 1983 and 1995, about 250 million sponges were sold, and it was a favorite among some women.
In 1995, the disappearing sponge was depicted on the television comedy "Seinfeld," when the character Elaine scoured stores for her favorite birth control and stretched her supply by setting "sponge-worthy" standards for dates.
Synova also sells an over-the-counter diagnostic test to help women detect vaginal infections.
Shares of Synova were down 26 cents, or 86.3 percent, to 4 cents in over-the-counter trading.