Ligand Pharmaceuticals has offered to acquire the assets of Novan for $15 million in cash and provide up to $15 million in debtor-in-possession financing. Novan recently filed for Chapter 11 reorganization and has entered into a stalking horse acquisition offer with Ligand. The transaction aims to preserve and maximize the value of Novan’s commercial business and berdazimer gel development assets, which is being developed for molluscum contagiosum infection. Ligand plans to out-license or sell Novan’s existing development programs and commercial assets. The deal is expected to close in Q3 2023.
Ligand Pharmaceuticals Inc. (NASDAQ: LGND) announced that it has made an offer to acquire the assets of Novan, Inc. (Nasdaq: NOVN) (“Novan”) for $15 million in cash and provide up to $15 million in DIP financing to Novan inclusive of a $3 million bridge loan already funded. Novan announced earlier today that it has filed for Chapter 11 reorganization and its entry into a stalking horse acquisition offer with Ligand. The transaction is designed to preserve and maximize the value of Novan’s commercial business and berdazimer gel development assets. Berdazimer gel is in development for molluscum contagiosum infection, which has a filed new drug application (“NDA”) with the Food and Drug Administration (“FDA”) with an assigned PDUFA goal date of January 5, 2024. Ligand acquired milestone and royalty rights to berdazimer gel in 2019. If Ligand’s bid is the successful bid in the anticipated bankruptcy sale and auction process, Ligand will acquire the Novan assets and consistent with Ligand’s business model, will seek to out license or sell the existing development programs and commercial business assets of Novan.
The terms of the proposed transaction are outlined below:
- Ligand has submitted a $15 million bid to acquire all the assets of Novan, including berdazimer gel, all other programs in development, the NITRICIL™ drug delivery technology, and the commercial assets of its EPI health business.
- Subject to court approval, Novan will be able to draw down from the $15 million secured DIP loan during the bankruptcy cases (which includes a $3 million bridge financing loan previously extended by Ligand) and will be repaid through the sale of Novan’s assets.
- The $15 million DIP loan will accrue interest at 12% interest annually and will be subject to a 6% increase in interest should Novan default on its loan agreement.
- Should the court accept a bid for the assets of Novan from another party, Ligand’s DIP loan will be repaid, and Ligand expects that its milestone and royalty rights will be preserved.
- The transaction is expected to close in the third quarter of 2023.
“In the first half of the year we have focused on fortifying our business team, including a sharpening of our capabilities and expertise in credit, reorganization and operations. We are well positioned to take advantage of opportunities such as the proposed acquisition of Novan’s assets,” said Todd Davis, CEO of Ligand. “Ligand has a proven track record of finding and investing in attractive assets that are in special situations and maximizing value – both for the assets and for shareholders.”
Want to publish your own articles on DistilINFO Publications?
Send us an email, we will get in touch with you.
Matt Korenberg, President and COO of Ligand, added, “We remain confident in the potential of berdazimer gel to be approved, and become an important treatment for molluscum contagiosum. There are currently no FDA-approved prescription drug treatment options for this commonly acquired, highly contagious viral skin disease, and, if approved by the FDA, berdazimer gel would be the first self-application topical treatment for this indication.”
Birch Lake is acting as financial advisor and Morgan Lewis is acting as legal advisor to Ligand for this transaction.
Source: Bio Space
