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U.S. biotech firm files for Chapter 11 bankruptcy

Wisconsin residents might be interested to hear that the U.S. biotech firm, Savient Pharmaceuticals Inc. filed for Chapter 11 bankruptcy protection on Oct 14. The company filed for the protection in a Delaware court. The firm also said that it has agreed to sell most of its assets to Sloan Holdings CV for approximately $55 million.

According to the firm, the agreement with Sloan Holdings CV would serve as a 'stalking horse bid" in an auction of the firm's assets that would be supervised by the court. The stalking horse bid serves as the minimum bid for the business designed to help it obtain debt relief, and it could still be topped by other bids. The company has been under pressure from its largest creditor to liquidate its assets. However, it said that it would still keep its drug for gout, Krystexxa, commercially available in the United States.

As of June 30, the firm reported its assets to be approximately $74 million and its liabilities to be $260 million. Shares for the company closed at 57 cents on Oct. 14. They have fallen 47 percent this year. Krystexxa has reportedly had disappointing sales since it was launched back in September 2010. The drug is designed to treat patients diagnosed with gout who don't respond well to conventional therapy.

Chapter 11 bankruptcy can serve as a form of debt protection for businesses without them having to file for complete bankruptcy. It helps them reorganize their debts and accept a payment plan to get them back on track. Bankruptcy attorneys might be able to assist business owners with filing for the appropriate type of bankruptcy. They might also be able to help them liquidate their assets and restructure their finances.

Source: Reuters, "Savient Pharmaceuticals files for Chapter 11 bankruptcy", October 14, 2013

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