Clovis Oncology, Inc., a biopharmaceutical company focused on acquiring, developing, and commercializing innovative anti-cancer agents in the U.S., Europe, and additional international markets, announced that it and certain of its subsidiaries (collectively, the “Debtors”) have voluntarily initiated a Chapter 11 proceeding in the United States Bankruptcy Court for the District of Delaware (“Bankruptcy Court”) and will seek to sell their assets through a court supervised sales process.
The Debtors have filed various “first day” motions with the Bankruptcy Court requesting customary relief that will enable them to transition into Chapter 11 without material disruption to their ordinary course operations, including seeking authority to obtain debtor-in-possession (“DIP”) financing and pay employee wages and benefits.
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In order to provide necessary funding during the Chapter 11 proceeding, Clovis has received a commitment of up to $75 million in a multi-draw DIP financing facility. Upon approval by the Bankruptcy Court, the DIP financing is expected to provide Clovis with the necessary liquidity to operate in the normal course and meet obligations to its employees, vendors and customers throughout the Chapter 11 proceeding while executing on the sales process.
Prior to the Chapter 11 filing, and subject to Bankruptcy Court approval, the Company entered into a “stalking horse” purchase and assignment agreement with Novartis Innovative Therapies AG (“Novartis”) to acquire substantially all of the rights of the Company to its pipeline clinical candidate, FAP-2286, as a therapeutic agent for an upfront payment of $50 million and up to an additional $333.75 million upon the successful achievement of specified development and regulatory milestones and $297 million in later sales milestones. The transaction is part of a sale process under Section 363 of the Bankruptcy Code that will be subject to compliance with agreed upon and Bankruptcy Court-approved bidding procedures allowing for the submission of higher or otherwise better offers, and other agreed-upon conditions. In addition, the transaction is subject to customary closing conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. In accordance with the sale process under Section 363 of the Bankruptcy Code, notice of the proposed sale to Novartis will be given to third parties and competing bids will be solicited. The Company will manage the bidding process and evaluate any bids received, in consultation with its advisors and as overseen by the Bankruptcy Court.
SOURCE: Businesswire