Following the disclosure of its bankruptcy filing, shares of PhaseBio Pharmaceuticals Inc. (NASD: PHAS) were up 21.29% to trade at $0.1709 in pre-market at the last check.
What was shared by PHAS?
PhaseBio (PHAS) declared yesterday that the company had decided to voluntarily file a petition in the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 of the Bankruptcy Code. PhaseBio also plans to submit a motion in connection with the case asking for permission to use the Section 363 auction and sale procedure.
If the court approves the proposed bidding procedures, interested parties will be required to submit binding proposals to purchase the bentracimab program assets of PhaseBio, which will be acquired free and clear of any liens and interests.
With a large pharmaceutical company with decades of experience in the areas of research, development, production, and commercialization of novel and advanced therapies and other medicines, including in the hospital and critical care space in the United States and the rest of the world, PHAS has entered into a confidential non-binding agreement with them in advance of this sales process.
This company would be named the stalking horse bidder in connection with a definitive asset purchase agreement for bentracimab (the “Purchase Agreement”) and would: pay PhaseBio cash in the amount of $40 million (the “Upfront Payment”); pay PhaseBio cash in the total amount of $60 million upon the achievement of certain regulatory milestones with regard to bentracimab; satisfy cure amounts in connection with the aforementioned agreements, and be designated as the stalking horse bidder.
This business would also put a $4 million down payment into escrow and, if accepted as the stalking horse bidder, would be eligible for a $2 million break-up fee and up to $750,000 in expenditures reimbursement from the profits of a sale to an alternative buyer.
How did PHAS get that conclusion?
In light of PhaseBio’s financial requirements and the difficulties it has faced in trying to negotiate a route ahead with SFJ Pharmaceuticals, the PHAS Board and management team feel that this organized approach offers the best potential alternative for PhaseBio (PHAS). Since the beginning of the year, PHAS has been working to find possible partners interested in progressing the bentracimab program. As a result of this effort, we have received a number of attractive proposals for the licensing and/or purchase of specific bentracimab commercial rights. SFJ was unable to accept any of the offers since doing so would have forced them to reconsider or waive specific conditions of their co-development agreement.
