Biolex Therapeutics, a small clinical-stage drug developer that attracted nearly $185 million in venture investment since its founding in 1997, has filed for Chapter 7 bankruptcy.

The Pittsboro, North Carolina-based company pulled plans to go public in 2008 when the financial crisis hit and later failed to find a partner for developing its plant-derived hepatitis C therapy, Locteron, a controlled-release interferon alfa.

Biolex’s most recent reported infusion of venture cash, a $5.9 million debt financing from undisclosed investors, came in May 2011.

Biolex’s July 3 North Carolina federal court bankruptcy filing cited $38 million in liabilities and assets of $803,000, according Triangle Business Journal. Lifesciences, Intersouth Partners, and Johnson & Johnson Development Corporation as the company’s largest shareholders.

Trials of Locteron have shown a more favorable side-effect profile and offer a more convenient dosing scheme than existing pegylated interferon products. But interferon-based therapies for hepatitis are on the way out as a new generation of non-interferon based therapies from companies such as Gilead, Achillion, and Bristol-Myers Squibb advance in clinical trials.

OctoPlus, a Netherlands-based partner of Biolex that supplied the troubled company with a critical part of Locteron’s formulation, says that Biolex had asked it to manufacture supplies in preparation for late stage trials, but cancelled the order and now owes it $2.3 million (€1.9 million), partly in cancellation fees.

Despite the bankruptcy, OctoPlus CEO Jan Egberts still holds out hope for Locteron. “Although we are obviously disappointed that the business operations of Biolex have ceased to exist, we remain confident about the long term clinical and commercial validity of Locteron and that the product will ultimately be commercialized,” he says.