US pharma company Savient Pharmaceuticals has filed for bankruptcy and is set to sell most of its assets for $55m.
The Chapter 11 filing is primarily down to continued disappointing sales of Savient’s lead product, gout treatment Krystexxa (pegloticase), which has failed to pick up sufficient revenues since its launch in the US in 2010.
The drug, which was initially turned down by the Food and Drug Administration (FDA) in 2009, made just $6.1m during the second quarter of 2013, during which Savient posted a net loss of $25.4m.
These struggles led to the announcement in July 2012 that 35 per cent of the company’s workforce would be cut, while the company has gone through two CEOs since 2011 in the form of John Johnson (now CEO at Dendreon) and Louis Ferrari, who left in August 2013.
Krystexxa has also struggled in Europe since being approved at the beginning of the year, and in England and Wales it face a rejection from the National Institute for Health and Care Excellence (NICE).
According to Reuters, Savient listed total assets of about $74m and liabilities of $260m as of June 30.
Savient now intends to sell its assets, thought to total around $74m, with WorldMeds subsidiary Sloan Holdings agreeing a ‘stalking horse’ sale of $55m to acquire the licence to Krystexxa and its remaining reserves, as well as other Savient assets.
The ‘stalking horse’ agreement means that Sloan’s offer is the miminum acceptable bid that can be tabled, although other companies can submit superior offers during an auction period. A final sale approval to be made by the end of 2013.
Stephen Jaeger, chairman of the board of Savient, explained that filing for bankruptcy and agreeing to sell company assets was “the best possible solution for Savient”.
“We are committed to an outcome that maximises value and allows Krystexxa to remain commercially available in the US to all of the patients who have come to rely on this life-changing therapy,” he said.
“Further, we are thankful to our dedicated employees who will continue to work vigorously to develop and provide Krystexxa throughout this process.”
Operations are expected to continue as normal until a final sale is agreed, including the continued servicing of distributors and wholesalers and payment of employee wages and salaries.