Biotech firm Savient Pharmaceuticals has sought protection under Chapter 11 of the bankruptcy law, due to years of disappointing sales for its primary product Krystexxa.
The Bridgewater, New Jersey-based company filed for protection in the U.S. Bankruptcy Court for the District of Delaware, and said in its filing that it will sell its assets to Sloane Holdings CV for roughly $55 million. Under the agreement, Sloane will serve as the stalking horse bidder in a court supervised auction of the company’s assets. The proposed deal with Sloane sets the floor, or minimum acceptable bid, and is subject to Bankruptcy Court approval, among other conditions.
The firm listed $260 million in liabilities and $74 million in assets. According to Reuters, Savient’s largest creditor has been pressuring it to liquidate in recent years.
The company manufactures Krystexxa, an alternative treatment for gout that has been marketed to those who failed to respond to traditional therapies and medicines. After developing the drug in 2010, however, low sales volume damaged the company financially and rendered it unable to meet its creditor obligations.
“The Board and management team have conducted a rigorous assessment of all of our strategic options and believe that this process represents the best possible solution for Savient, taking into account our financial and operational issues and helping to unlock the value of Krystexxa,” said Stephen Jaeger, chairman of the board of Savient.
However, the company noted that it plans to make the gout treatment drug commercially available throughout the U.S. during its bankruptcy proceedings. In addition, Savient has negotiated with its senior secured noteholders to ensure it has sufficient liquidity to conduct its business uninterrupted and to continue to meet its operational financial obligations. The biotech firm will also maintain employee wages and salaries, as well as its worker benefits program.
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