PALO ALTO, Calif. - Eiger BioPharmaceuticals, Inc. (NASDAQ:EIGR), a biopharmaceutical company, has filed for chapter 11 bankruptcy protection and announced a "stalking horse" agreement for the sale of its drug Zokinvy® (lonafarnib) to Sentynl Therapeutics, Inc., a company specializing in rare diseases.
The terms of the agreement, pending court approval, involve a payment of up to $26.0 million from Sentynl Therapeutics, with certain price adjustments including daily reductions if the sale concludes after April 24, 2024.
This filing, made in the United States Bankruptcy Court for the Northern District of Texas, is part of a strategic move by Eiger to sell substantially all of its assets and facilitate an orderly wind-down of its operations. The company has filed customary "first day" motions with the bankruptcy court to continue its operations without significant disruption and maintain commitments to stakeholders during the transition.
The sale of Zokinvy®, an FDA-approved treatment for a rare aging disease, is subject to a court-supervised bidding process as outlined by Section 363 of the Bankruptcy Code, which allows other interested parties to place competing offers for the company's assets.
Eiger has engaged Sidley Austin LLP for legal counsel, Alvarez & Marsal for financial advice, and SSG Capital Advisors, LLC as its restructuring investment banker. Information regarding the chapter 11 case and the potential sale of assets is available through Kurtzman Carson Consultants LLC, a third-party bankruptcy claims and noticing agent.
The company has expressed intentions to continue supplying Zokinvy® to patients without interruption and to sustain normal operations throughout the chapter 11 proceedings.
The information in this article is based on a press release statement from Eiger BioPharmaceuticals, Inc.
InvestingPro Insights
In light of Eiger BioPharmaceuticals' recent chapter 11 bankruptcy filing, a closer look at the company's financial health through InvestingPro data and tips offers a clearer picture of its current market position. Eiger's market capitalization stands at a mere $3.14 million, reflecting the significant challenges the company faces. The company's revenue, as of the last twelve months ending Q3 2023, is reported at $14.67 million with a modest year-over-year growth of 3.66%. Despite this, the company's gross profit margin is remarkably high at 98.17%, suggesting that while Eiger's sales are relatively low, the cost of goods sold is minimal, which could be a positive aspect for potential buyers interested in its assets.
However, the financial strain is evident with an operating income margin of -570.32% and an adjusted operating income reported at -$83.64 million, indicating that the company's expenses far outweigh its revenue. This financial distress is further highlighted by the company's significant stock price decline, with a one-year price total return of -81.4%, showcasing the market's reaction to Eiger's performance and outlook.
InvestingPro Tips reveal that Eiger is quickly burning through cash and has been trading at a low revenue valuation multiple. Analysts do not anticipate the company will be profitable this year, and the stock price movements have been quite volatile, which may deter some investors. However, it's worth noting that the company's liquid assets exceed its short-term obligations, which could provide some financial cushion during the restructuring process.
For readers interested in a deeper analysis, there are additional InvestingPro Tips available, offering insights such as the stock's significant hit over the last six months and the lack of dividend payments to shareholders. To access these tips and more, visit InvestingPro and consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With InvestingPro, you can gain a comprehensive understanding of Eiger BioPharmaceuticals' financial standing and make more informed decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.