Oscient files for chapter 11 protection and sells Factive
This article was originally published in Scrip
Oscient Pharmaceuticals and its wholly owned subsidiary Guardian II Acquisition have both filed for Chapter 11 bankruptcy protection in the US, and Oscient is selling its antibiotic Factive (gemifloxacin mesylate) to Cornerstone Therapeutics.
Last month Oscient said that it was cutting 180 jobs, including 150 sales positions, to conserve cash as it lacked sufficient finances until the third quarter. It planned to stop promoting Factive and Antara (fenofibrate) but would still make them available for doctors and patients.
Cornerstone will pay $5 million for the North American and certain European rights to Factive, plus the value of its inventory at closing and a 15% royalty on Factive sales. Factive generated around $16 million in net sales in 2008.
Craig Collard, president and CEO of Cornerstone, said the transaction was part of the company's strategy to acquire new drugs for the respiratory market.
"We believe that this product fits well within our existing portfolio and that our respiratory-focused sales force will be able to drive prescription growth of Factive in the US market."
The sale is subject to customary closing conditions, approval of the bankruptcy court and an auction process in which Oscient will seek to secure the highest bid for the Factive assets.
The bankruptcy court is expected to hand down its decision on the auction process within the next 60 days.
Oscient and Guardian are continuing to seek strategic alternatives, including a buyer for Antara and other assets. Oscient's stock will be de-listed from Nasdaq from July 21st for failing to pay certain fees required by the listing rule. The company has no plans to appeal the Nasdaq decision.
Menarini, which acquired the European commercialisation rights to Factive in October 2007, withdrew an EU marketing application for the product last month. It said its decision was based on the CHMP being unable to conclude a positive benefit-risk balance from the data provided (scripnews.com, June 24th, 2009).
Factive has composition-of-matter patent protection until 2018, longer than that of any currently marketed fluoroquinolone or other antibiotic widely used to treat respiratory tract infections, Cornerstone says.