PhaseBio Pharmaceuticals plans to file Chapter 11 bankruptcy and sell off its bentracimab assets under a "stalking horse: arrangement with an unnamed large pharmaceutical company, the company announced Monday.
Bentracimab is being developed to reverse the anti-clotting effects of ticagrelor, more commonly known as AstraZeneca’s Brilinta.
Under a stalking horse arrangement, a buyer acts as the stalking horse bidder and agrees to set a minimum floor bid for the assets. Potential buyers can bid on the assets but must exceed the minimum bid. If no one does, the stalking horse bidder acquires the assets.
In this case, the unidentified company has agreed to pay PhaseBio $40 million in cash and another $60 million for hitting certain regulatory milestones related to bentracimab. It will also provide a $4 million deposit into escrow and, if approved as the stalking horse bidder, would receive a $2 million break-up fee and reimbursement of expenses of up to $750,000 to be paid from the proceeds of a sale to a different bidder.
“The Board and management team have thoroughly assessed all of our strategic options and believe that this structured process represents the best possible solution for PhaseBio, taking into account our financial needs and the challenges we have encountered while trying to negotiate a path forward with SFJ Pharmaceuticals,” Jonathan Mow, CEO of PhaseBio, stated.
PhaseBio and SFJ - a Tumultuous History
In January 2020, PhaseBio announced a financing and co-development collaboration with SFJ Pharmaceuticals in support of bentracimab.
Under the terms of the deal, SFJ agreed to fund up to $120 million in support of the drug’s development and take on a central role in clinical development and regulatory activities outside the U.S. SFJ would fund up to $90 million in development expenses through the end of 2021 and up to another $30 million based on various clinical milestones.
In a September filing, PhaseBio indicated that SFJ stated it needed to return the rights to bentracimab.
“SFJ has elected to cause the Company’s business related to bentracimab to be transferred to SFJ as a result of the Company’s failure to remedy its Going Concern Condition within the Going Concern Cure Period,” PhaseBio wrote in the SEC filing.
SFJ expected PhaseBio to transfer the rights to the drug within 10 days.
The two companies have been negotiating since early 2022 over the potential transfer of bentracimab program assets to SFJ. However, they were unable to reach a deal. SFJ then withdrew from the negotiations and informed PhaseBio about the transfer the day after the Going Concern Period expired.
SFJ is a private equity-backed firm that specializes in co-development deals. It would, theoretically, have the capabilities necessary to move bentracimab through the FDA approval process, but that would depend upon the FDA’s willingness to go along with PhaseBio’s plans to include Phase III data from only 25 to 30 patients with uncontrolled bleeds in the submission.
Analysts note that this was likely going to be a lengthy legal battle between PhaseBio and SFJ, but with less than $8 million in operating funds, PhaseBio didn’t have many resources to continue operations, let alone pay for a protracted legal battle.
In May, PhaseBio reported a successful pre-Biologics License Application (BLA) meeting with the FDA over a potential regulatory submission for bentracimab. At that time, they indicated plans to submit a BLA in the fourth quarter of this year.
The company stated it had plans to enroll 35 patients receiving ticagrelor who experienced uncontrolled bleeding events in the REVERSE-IT trial.
The FDA also confirmed a prior recommendation for post-marketing requirements that PhaseBio complete enrollment in the Phase III REVERSE-IT trial and submit data from at least 200 patients while also launching a post-approval registry study ahead of the product launch after a potential Accelerated Approval.
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