Oscient Pharmaceuticals Files Voluntary Petition for Relief Under Chapter 11 of the United States Bankruptcy Code
WALTHAM, Mass.--(BUSINESS WIRE)--Oscient Pharmaceuticals Corporation (NASDAQ: OSCI) and its wholly owned subsidiary, Guardian II Acquisition Corporation, today each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Massachusetts. Oscient and Guardian will continue to manage and operate their businesses and assets during the pendency of the bankruptcy case, subject to the supervision of the Bankruptcy Court.
In conjunction with the filing, Oscient and Guardian are seeking customary authority from the Bankruptcy Court that will enable them to continue operations and deliver products to customers in the ordinary course of business and without interruption.
The companies currently sell two products, ANTARA® (fenofibrate) capsules, which is a cardiovascular product indicated for the adjunct treatment of hypercholesterolemia (high blood cholesterol) and hypertriglyceridemia (high triglycerides) in combination with diet, and FACTIVE® (gemifloxacin mesylate) tablets, which is a fluoroquinolone antibiotic indicated for the treatment of acute bacterial exacerbations of chronic bronchitis and community-acquired pneumonia of mild to moderate severity.
In connection with the filing Oscient entered into an agreement with a subsidiary of Cornerstone Therapeutics Inc. for the sale of assets related to FACTIVE. Under the terms of the agreement, Cornerstone will pay Oscient $5 million plus the value of FACTIVE inventory at closing and a royalty on Cornerstone's sales of FACTIVE, less certain adjustments, through the fifth anniversary of the closing date. The sale is subject to customary closing conditions, approval of the Bankruptcy Court and the conduct of a Bankruptcy Court supervised auction process in which Oscient will seek competing bids to achieve the highest price possible for the FACTIVE assets.
Oscient and Guardian are continuing to explore strategic alternatives, including seeking a buyer for the ANTARA product and other assets.
It is Oscient's belief that there will be no value for the common stockholders in the bankruptcy liquidation process. Stockholders of a company in Chapter 11 generally receive value only if all claims of the company’s secured and unsecured creditors are fully satisfied. Oscient believes all such claims will not be fully satisfied.
Probable NASDAQ De-listing
Also, on July 10, 2009 Oscient received a letter from NASDAQ notifying it that its common stock will be de-listed from the Nasdaq Stock Market effective July 21, 2009 for failure to pay certain fees required by listing Rule 5210(d). At this time, the Company does not intend to appeal the decision and expects that the Company’s common stock will be de-listed.
About Oscient Pharmaceuticals
Oscient Pharmaceuticals Corporation markets two FDA-approved products in the United States: ANTARA® (fenofibrate) capsules, a cardiovascular product and FACTIVE® (gemifloxacin mesylate) tablets, a fluoroquinolone antibiotic. ANTARA is indicated for the adjunct treatment of hypercholesterolemia (high blood cholesterol) and hypertriglyceridemia (high triglycerides) in combination with diet. FACTIVE is approved for the treatment of acute bacterial exacerbations of chronic bronchitis and community-acquired pneumonia of mild to moderate severity.
This news release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements with regard to (i) the continued availability of ANTARA and FACTIVE to physicians and patients, (ii) the Company’s ongoing review of strategic alternatives, including the Company’s ability to locate a buyer for ANTARA and its other assets under the supervision of the bankruptcy court, (iii) the Company’s ability to fund its working capital needs during the Chapter 11 process, (iv) the Company’s ability to obtain bankruptcy court approval of the asset purchase agreement with Cornerstone and consummate the agreement in a timely manner, (v) the Company’s ability to continue to operate in the ordinary course and manage its relationships with its creditors, noteholders, vendors, and customers during the Chapter 11 process given the Company’s financial condition, and (vi) the lack of value for the common stockholders in the bankruptcy liquidation process. Forward-looking statements represent our management’s judgment regarding future events. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “expect,” “intend,” “anticipate,” “estimate,” and similar words, although some forward-looking statements are expressed differently. We do not plan to update these forward-looking statements. You should be aware that our actual results could differ materially from those contained in the forward-looking statements due to a number of risks affecting our business. These risks include, but are not limited to our ability to successfully commercialize and market ANTARA or FACTIVE during the Chapter 11 process due to: the limitations on our resources and experience in the commercialization of products; the elimination of our commercial organization; the lack of acceptance by physicians, patients and third party payors; unanticipated safety, product liability, efficacy, or other regulatory issues; problems relating to manufacturing or supply; delays in the supply of products by the third party manufacturers and suppliers on which we rely; inadequate distribution of the products by wholesalers, pharmacies, hospitals and other customers; and competition from other products; and our ability to defend our intellectual property position for ANTARA and FACTIVE and claims against us by third parties. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2008 and in other filings that we may make with the Securities and Exchange Commission from time to time.