By Chris Wack
Novan said Monday that it has entered into a stalking horse asset purchase agreement with Ligand Pharmaceuticals prior to filing voluntary petitions for relief under chapter 11 of the U.S. Bankruptcy Code in Delaware.
The stock is halted at 63 cents a share in premarket trading.
The company said it will continue to operate its business as a "debtor-in-possession" under the jurisdiction of the bankruptcy court.
The company also entered into a secured DIP credit facility with Ligand in the principal amount of $15 million. The cash payable at closing will be reduced dollar-for-dollar by the outstanding balance of the DIP credit facility which will be repaid at closing.
The transaction will be subject to approval by the bankruptcy court.
On Friday, Novan entered into a bridge loan with Ligand for the principal amount of $3 million. This pre-petition loan provided needed working capital to the company for general corporate purposes and is secured by the assets of Novan. The pre-petition bridge loan will be rolled into the DIP credit facility after Bankruptcy Court approval of the DIP credit facility.
The company plans to continue to work with the U.S. Food and Drug Administration to progress towards potential approval of berdazimer gel, 10.3%, with a PDUFA goal date of Jan. 5, 2024. In the second quarter, the company received its mid-cycle review communication from the FDA, in addition to the manufacturing facility's pre-approval inspection and establishment inspection report.
Novan has engaged Raymond James & Associates to advise on its strategic options, including the process to sell its assets in connection with the chapter 11 case.
Write to Chris Wack at chris.wack@wsj.com
(END) Dow Jones Newswires
July 17, 2023 09:09 ET (13:09 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
Comments