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

U.S. biotech company BioXcel Therapeutics has filed for bankruptcy protection and reached an agreement to transfer assets to Israeli pharmaceutical company Teva.

According to Fierce Biotech on the 28th (local time), BioXcel filed for bankruptcy protection that day under Chapter 11 of the U.S. Bankruptcy Code. The company had told investors that it was running out of operating cash and would not have enough money to continue operations through the end of August.

BioXcel secured a loan earlier this week but ultimately opted for bankruptcy protection after failing to find a solution to its underlying financial difficulties. According to the bankruptcy filing, Teva emerged as the leading strategic acquisition candidate after months of negotiations.

Teva has already completed due diligence on the assets, and BioXcel selected it as the “stalking horse” bidder. Under the terms of the agreement, Teva can acquire most of BioXcel’s assets for an upfront payment of $57.5 million (about 80.5 billion won).

The deal also includes up to $67.5 million (about 94.5 billion won) in milestone payments. Teva has deposited $5.7 million as a performance bond. BioXcel may receive better offers during the subsequent bidding and auction process, but the Teva agreement sets a baseline for the value of the assets.

BioXcel’s key asset is BXCL501, a neuroscience drug candidate under review by the U.S. Food and Drug Administration (FDA). The drug, a dexmedetomidine orally dissolving film, was submitted for approval to treat acute agitation at home in patients with bipolar disorder or schizophrenia.

The FDA is expected to decide whether to approve the drug by Nov. 14. If BXCL501 is approved by that deadline, BioXcel will receive the full $67.5 million in milestone payments from Teva.

If the FDA misses its current target date but approves the drug by Feb. 27 next year, BioXcel will receive $55 million. If approval comes later, regulatory milestones will be reduced, but BioXcel will be eligible for payments tied to net sales.

BioXcel also has other pipeline assets, including the immuno-oncology candidate BXCL701. However, the stalking-horse agreement focuses on its neuroscience assets. In a statement, Teva said the acquisition would strengthen its neuroscience portfolio and align with its strategy of securing molecules with long-term growth potential.