KaloBios Pharmaceuticals, Inc., a developmental stage biopharmaceutical company focused on advancing medicines for patients with neglected and rare diseases, announced that it has emerged from Chapter 11 bankruptcy and has also acquired the rights from Savant Neglected Diseases LLC to develop benznidazole for the treatment of Chagas disease.
“The Company has risen from the ashes with a great deal of hard work and new thinking on how a biopharmaceutical company can operate and a clear vision to move forward as a successful, positive leader in our industry,” said Cameron Durrant, MD, KaloBios chairman and CEO. “As one of the few companies solely focused on neglected and rare diseases, KaloBios will continue to move swiftly and apply itself to the real task of bringing patients crucial treatments they need, but to which they may not have access. We also see a unique opportunity to bring new ideas to address concerns, such as drug pricing, for all stakeholders in healthcare – with our Responsible Pricing Model as just the beginning.”
Under the terms of the agreement with Savant, the Company has made an upfront payment of $3 million and issued to Savant a warrant to purchase 200,000 shares of KaloBios common stock. The agreement includes milestones and royalties in connection with the development and potential approval and commercialization of benznidazole. If approved, the Company may receive a Priority Review Voucher.
KaloBios’ reorganization plan was overwhelmingly accepted by its creditors and other stakeholders and thereafter was confirmed by the Delaware bankruptcy court on June 16, 2016.
The exit equity financing of $11 million comes on top of a $3 million debtor-in-possession loan funded in May 2016, with both financings provided by investors Black Horse Capital LP, Black Horse Capital Master Fund Ltd., Cheval Holdings Ltd. and Nomis Bay Ltd. This additional liquidity provides a firm base to support the Company’s operations going forward. In connection with the bankruptcy exit, the debtor-in-possession loan converted into shares of KaloBios common stock.
Black Horse Capital managing member Dr. Dale Chappell will join the KaloBios Board of Directors effective immediately. In addition, current Board member David Moradi has stepped down after helping to successfully guide the company through the bankruptcy process. Dr. Durrant and Ronald Barliant will remain on the Board of Directors. Ezra Friedberg and Timothy Morris will also join the Board of Directors as designees of the investors.
“On behalf of the Board of Directors, I want to thank David for his dedication, perseverance and commitment to KaloBios and its vision to emerge as a truly different kind of biopharmaceutical company. We are well on our way thanks to a clear strategy and an intense period of a lot of hard work by a small, focused and competent team,” said Dr. Durrant.
“I am pleased that KaloBios is emerging from Chapter 11 with a clear path forward as a stronger, more focused company,” said Mr. Moradi. “This positive outcome for all stakeholders is the result of the tireless efforts of the Company’s Board of Directors, management, employees and advisors over the past several months.”
KaloBios will file a report on Form 8-K to the Securities and Exchange Commission within the required timeframe.