Boulder-Based Pharmaca’s Parent Company Files for Bankruptcy
Boulder-based Pharmaca Integrative Pharmacy Inc.’s parent company, Medly Health Inc., filed for Chapter 11 bankruptcy protection in December. The filing requests that bankruptcy petitions for Medly Health and 31 of its affiliates, including Pharmaca, be jointly administered, which may aid in rendering the process less costly.
Brooklyn, New York-based Medly Pharmacy Inc., reporting more than $110 million in secured debt, is seeking the court’s authorization to sell its 22 Pharmaca stores. Medly acquired Pharmaca in 2021. Pharmaca, founded in June 2000 in Boulder, was the first integrative pharmacy chain in the country to join traditional pharmacy service offerings with natural and supportive health solutions, including natural health and beauty aids. Medly failed to get a $100 million loan for which the company applied in the summer of 2022. In the court filing, Medly stated the lack of those funds made buying the drugs it needed to fill prescriptions impossible. As a result, more than 20 of its stores closed in 2022.
“The debtors intend to seek approval of the sale of the four remaining Medly pharmacies’ prescription lists to ensure patients are able to transfer their prescriptions prior to the closing of those stores,” Medly CEO Richard Willis said. “Second, the debtors will seek approval of bid procedures for the sale of the Pharmaca business line, which includes 22 stores, as a going concern. The debtors have identified a buyer to act as a stalking horse in such sale. The debtors believe pursuing both sales in these Chapter 11 cases is the best path forward and is in the best interests of their estates and creditors.”
The company lists liabilities including $81 million to affiliates of TriplePoint Capital, $20 million to Silicon Valley Bank, $10 million in trade debt to Cardinal Health and $10 million in secured notes issued to an array of investors. Willis also said that Medly owes about $47 million in trade debt, outstanding salary, and other unsecured obligations. MedPharmaca Holdings Inc. will make a starting $18.5 million offer at a bankruptcy auction for nearly all of Medly’s assets, including the Pharmaca stores, but would get a $450,000 breakup payment and up to $500,000 in reimbursed expenditure if some other buyer wins the bid-off.
Medly operates 21 pharmacy locations, four online pharmacies, and a wellness storefront in Seattle. It also owns the Pharmaca.com web site. Pharmaca locations in Boulder are at 2700 Broadway and 645 S. Broadway. Another storefront at 17th and Pearl streets closed its doors in 2020.