BioXcel Files for Bankruptcy Protection; Teva to Acquire Assets for $57.5 Million

BioXcel Therapeutics has filed for bankruptcy protection and arranged to sell its assets to Teva Pharmaceuticals for $57.5 million.

According to Fierce Pharma on the 28th (local time), Connecticut-based BioXcel filed for Chapter 11 bankruptcy protection in court that day. The company had told investors in recent weeks that its cash crunch was worsening and that it lacked the funds to operate through the end of August.

BioXcel secured a loan earlier this week but failed to find a fundamental solution to its financial difficulties. Bankruptcy filing documents say that after months of acquisition negotiations, Teva emerged as the best candidate to purchase the assets.

Teva has already completed extensive due diligence on the assets, and BioXcel selected it as the “stalking-horse” bidder. A stalking-horse bidder is an initial bidder that sets the minimum price for a bankrupt company’s assets.

Under the terms of the agreement, Teva will acquire most of BioXcel’s assets for an upfront payment of $57.5 million, with up to an additional $67.5 million payable upon achievement of milestones. Teva deposited a $5.7 million good-faith deposit.

BioXcel’s key asset is BXCL501. The candidate, which delivers dexmedetomidine in an orally dissolving film, is under review by the U.S. Food and Drug Administration (FDA). The FDA will decide by Nov. 14 whether to approve it for the at-home acute treatment of agitation in patients with bipolar disorder or schizophrenia.

If BXCL501 is approved by the deadline, BioXcel will receive the full $67.5 million in milestone payments from Teva. If the FDA approves it by Feb. 27 next year, even after missing its current target date, BioXcel will receive $55 million. If approval comes later, regulatory milestone payments will decrease, but BioXcel may receive payments tied to net sales.

Teva said in a statement that the acquisition could strengthen its neuroscience portfolio. The Israeli pharmaceutical company is focused on securing molecules with clear strategic fit and long-term growth potential.