Savient Pharmaceuticals, Inc. has announced that it has elected to file voluntary petitions under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Savient also filed a motion seeking authorization to pursue a sale process under Section 363 of the U.S. Bankruptcy Code. To this end, Savient has entered into an acquisition agreement with a “stalking horse” bidder, Sloan Holdings C.V., a subsidiary of US WorldMeds, LLC, which it has submitted to the Court today. Under the proposed agreement, Sloan will acquire substantially all of the assets of Savient, including all KRYSTEXXA assets, for approximately $55 million. The sale agreement contemplates a Court-supervised auction process, which is designed to achieve the highest or best offer for the Company’s assets. The agreement with Sloan sets the floor, or minimum acceptable bid, and is subject to Bankruptcy Court approval and certain other conditions. “The Board and management team have conducted a rigorous assessment of all of our strategic options and believe that this process represents the best possible solution for Savient, taking into account our financial and operational issues and helping to unlock the value of KRYSTEXXA,” said Stephen O. Jaeger, Chairman of the Board of Savient. “We are committed to an outcome that maximizes value and allows KRYSTEXXA to remain commercially available in the U.S. to all of the patients who have come to rely on this life-changing therapy. Further, we are thankful to our dedicated employees who will continue to work vigorously to develop and provide KRYSTEXXA throughout this process.” The proposed bidding procedures, if approved by the Court, would require interested parties to submit binding offers to acquire the Company. Such parties could include strategic and financial bidders. Assuming qualified bids are submitted, an auction would then be held.
A final sale approval hearing is anticipated to take place shortly after the auction with the anticipated closing to occur by the end of 2013. Savient has filed a series of customary motions with the Bankruptcy Court seeking to ensure the continuation of normal operations during this process. Savient has negotiated with its senior secured noteholders to ensure that it has sufficient liquidity to conduct its business uninterrupted and continue to meet its operational financial obligations, including, subject to expected bankruptcy court approval, the timely payment of future employee wages and salaries, as well as maintain benefits; continued servicing of distributors and wholesalers to ensure timely fulfillment of orders and shipments; and other obligations to physicians and patients who depend on this important therapy.
