Pfizer Wins Bid; Buys BIND Therapeutics Bankruptcy Assets for $40 Million
July 27, 2016
By Mark Terry, BioSpace.com Breaking News Staff
As reported on July 25, Cambridge, Massachusetts-based Bind Therapeutics was selling off most of its assets as part of bankruptcy proceedings. Pfizer had been approved as the stalking horse bidder, with a floor bid of $20 million in cash, as well as taking on various contractual liabilities. Two other unidentified companies joined the auction.
BIND announced today that Pfizer was the winner, with a bid of $40 million. The completion of the auction is subject to U.S. Bankruptcy Court approval. A hearing has been scheduled for July 27, 2016.
On May 1, BIND filed for voluntary Chapter 11 bankruptcy. As part of that, it was to sell off assets. A stalking horse bid is when a company, in this case Pfizer, agrees to set a floor bid. It’s a way of testing the market for its assets and avoiding low bids as part of or prior to a court auction.
BIND focuses on targeted and programmable compounds called Accurins. They are engineered to target specific cells and tissues and deliver drugs to the disease sites.
BIND has ongoing collaborations with Pfizer, AstraZeneca , Hoffman-La Roche (ROG), Merck & Co. , Macrophage Therapeutics, Synergy Pharmaceuticals, PeptiDream and Affilogic.
In February, BIND and AstraZeneca published data in the journal Science Translational Medicine describing their development of the first nanoparticle preclinical candidate. An introduction to the article writes, “A class of drugs, called kinase inhibitors, could stop cancer in its tracks … if only these drugs could reach the tumors, stay for a while, and not be toxic. Hypothesizing that a nanoparticle formulation would solve the inhibitors’ woes, Ashton and Colleagues investigated several different compositions of so-called Accurins—polymeric particles that encapsulate charged drugs through ion pairing.”
BIND Therapeutics is responding positively to the news of the asset buy, rising from $0.52 on July 21 to its current price of $1.17.
It’s not clear if buying BIND stock is a good investment, and Insider Financial, writing before today’s announcement, said, “The bottom line is, nobody on the outside knows what’s going to happen to BIND once the asset sale goes through.”
Chris Sandburg, writing for Insider Financial, goes on to say, “Well, there’s one idea that shareholders will be the benefactors of any capital raised through the asset sale. There’s a very, very slim chance that this might happen, but given the numbers involved, it’s unlikely. Pfizer’s bid is unlikely to cover liabilities after things like severance, fees etc. come into the equation, and even if it does (or if one of the other two bids proves to do so) the chances of common shareholders seeing anything by way of return are practically zero.”
It’s worth reinforcing that Sandburg’s analysis is based on a $20 million asset sale, not the just-announced $40 million.
BIND was founded in 2006 by MIT researcher Robert Langer and went public on September 20, 2013. BIND’s technology was based on work by Langer and Harvard Medical School scientist Omid Farkohzad.
It raised $76.1 million in the 2013 IPO and another $20 million in 2015. Earlier the company had raised $62.6 million in four rounds of equity funding with six investors: ARCH Venture Partners, Endeavour Vision, Flagship Ventures, NanoDimension, Polaris Partners, and RUSNANO.
However, at the end of 2015 the company had $40 million in cash and short-term investments, and slashed almost 40 percent of its staff, including a research operation in Russia with 11 employees. The bankruptcy was initiated because of an April 26 notice by Hercules Capital, a Palo Alto, California-based venture debt firm that demanded full payment of the $13.2 million balance on its load, including $1.2 million in fees.