Arbios Systems Inc., which has been developing an alternative to traditional kidney dialysis, said it has filed for Chapter 11 bankruptcy protection and may sell the company while working with its creditors.

Pasadena-based Arbios, which made the announcement late Friday, had in August suspended operations except for efforts to raise capital to support the development of its Sepet technology, or enter into a strategic transaction.

The company’s board concluded that due to company’s limited cash and current economic conditions, the best course is to sell the company or its assets through a bid solicitation plan under bankruptcy protection.

The Sepet is an outside-the-body liver-assist device for blood purification of patients suffering from cirrhosis due to chronic liver disease and who have been hospitalized.

The company’s principal assets include its technology, which the company said successfully completed a mid-stage clinical trial and had obtained Food and Drug Administration permission to start a late-stage pivotal trial. It also had made progress in gaining European regulatory approvals.