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Bankrupt MetaMorphix putting its assets up for sale

The owners of MetaMorphix Inc., which makes one of the most popular DNA tests to determine dog breeds, are putting the company and its assets up for sale as part of its bankruptcy reorganization.

The Calverton-based biotechnology company has been in bankruptcy since Jan. 28, 2010, when its creditors filed an involuntary Chapter 7 case against it. MetaMorphix was later able to have the case converted to Chapter 11, allowing it to re-organize. The result of the re-organization is that the company will auction off all of its assets on March 8 in Wilmington, Del.

Court approval for the auction sales is expected the following day.

The asset sale, which was announced Friday, comes after the company struggled to secure funding to emerge from bankruptcy. MetaMorphix CEO Edwin Quattlebaum said in October — when the court granted the Chapter 11 conversion — that efforts to secure funding had been underway since the case was initially filed but were not going well.

“As of this date, I regret to report that those efforts have not resulted in the financing necessary to fund reorganization under Chapter 11 of the bankruptcy code,” Quattlebaum wrote in an October court filing.

The company did not respond to a request for comment Friday.

In a Jan. 27 filing with the court, the company reported having $5,298 in the bank at the end of December after making payroll and other payments. And, through the end of September, MetaMorphix reported a net loss attributable to shareholders of $7.24 million, with $2,300 in accounts receivable. The company said it had assets of $41.2 million.

MetaMorphix was founded in 1994 and specializes in genomic tests for animals. Its most popular product is Canine Heritage XL, a canine DNA test that, at $79.95, will identify up to 100 different breeds through a cheek swab sample.

The company has two technology platforms — animal genomics and growth and differentiation factors, which includes the canine DNA test. The genomics business, MMI Genomics, uses DNA testing in the livestock business.

MetaMorphix faced a series of setbacks in recent years including the loss of one of its larger sources of revenue in October 2009 when agribusiness giant Cargill stopped using its genetic cattle testing program in feedlots. Cargill, which operates feedlots throughout the country, had partnered with MetaMorphix to use its “Tru-Marbling” and “Tru-Tenderness” tests. For about $20 per cow, the tests used 189 DNA markers to determine if an animal was genetically predisposed to produce a higher grade of beef.