Teva Pharmaceuticals is the ‘stalking horse bidder’ to kick off the auction process for BioXcel Therapeutics’ AI-derived assets as the biotech files for Chapter 11 bankruptcy.
AI neuroscience biotech BioXcel Therapeutics has filed for bankruptcy and plans to sell all of its assets to Tel Aviv–based pharma giant Teva Pharmaceuticals.
Teva will kick off the sale process with a bid of $57.5 million upfront and an additional $67.5 billion in milestone payments, allowing other buyers to compete through the bankruptcy auction. This makes Teva the “stalking horse bidder,” according to Section 363 of the U.S. bankruptcy code’s Chapter 11.
“Following a comprehensive review of strategic alternatives, we believe this option provides a clear framework to pursue a value-maximizing transaction,” BioXcel CEO Vimal Mehta said in a Friday release.
New Haven, Conn.–based BioXcel markets the drug Igalmi as a treatment for agitation associated with schizophrenia or bipolar I or II disorder in adults and is seeking FDA approval for at-home use of the product, which is also known as BXCL501, with an expected decision Nov. 14. The biotech is also investigating Igalmi’s use in agitation associated with Alzheimer’s dementia.
BioXcel assured that Igalmi will still be commercially available to patients and that the company would continue to support them through the process. The company also received a $19 million debtor-in-possession financing to maintain business operations and fund the Chapter 11 proceedings.
BioXcel has also filed a series of motions with the court to continue normal operations, including paying employee wages and benefits throughout the bankruptcy process, according to the release.
Teva, once known as primarily a generics maker, has shifted to innovative medicine in recent years, and in June closed a deal to purchase neuroscience biotech Emalex Biosciences for up to $900 million. The company sees the BioXel bankruptcy as an open door for new products and pipeline prospects, particularly under its “pivot to growth” strategy.
“This opportunity strengthens our neuroscience portfolio and reflects our disciplined approach to pursuing innovative assets with a clear strategic fit … while balancing risk and value creation,” Evan Lippman, Teva’s executive vice president of business development, in the company’s own Friday release.
Shares of BioXcel Therapeutics were down more than 70% to $0.19 per share as of publication.
