CAMBRIDGE, Mass.—Biotechnology company BIND Therapeutics has announced the receipt of two bids that qualify to participate in its Court-authorized auction that began at 10 a.m. EST July 25. These bids come in addition to Pfizer Inc.'s initial $20-million stalking horse bid. BIND Therapeutics intends to choose the highest and best offer at the conclusion of the auction, and the winning bid will be subject to approval by the U.S. Bankruptcy Court. A hearing is scheduled for July 27, 2016. The names of companies that submitted the two bids were not disclosed.
This is the culmination of several restructuring decisions that began back in April. BIND announced a restructuring plan that would optimize operations and reduce its operating expenses. The plan included a 38-percent reduction in the company's workforce and BIND also planned to consider options for its wholly owned subsidiary in Moscow. Andrew Hirsch, president and CEO of BIND, noted at the time that “This workforce reduction is a necessary action to bring our operating costs to a more sustainable level, allowing the ongoing development of our pipeline of innovative therapeutic candidates that address challenges small-molecule chemistry or antibody engineering have not been able to overcome.”
Despite these efforts, however, BIND initiated voluntary Chapter 11 bankruptcy protection on May 1, with the plan of conducting a sale of assets pursuant to Section 363 of the Bankruptcy Code. This coincided with the announcement of the company's first quarter 2016 financial results. BIND saw research and development expenses of $11.2 million, with cash, cash equivalents and short-term investments of approximately $21.5 million as of March 31. The company reported development revenue of $1.9 million, as well as a net loss for the quarter of $12.7 million, which was largely attributed to an increase in clinical trial activities and a decrease in collaboration revenue for the quarter.
"We believe this decision is in the best interests of the company and its stockholders," said Andrew Hirsch, president and chief executive officer, BIND Therapeutics. "The protections afforded by Chapter 11 provide for an orderly process and additional time that enables us to pursue the strategic and financial alternatives that are in process. The filing minimizes the impact from the recent demand by our lender, Hercules Technology III, L.P, for accelerated repayment of our outstanding loan. Our current cash and assets exceed the loan amount, and we are current on our regularly scheduled repayment obligations. Through this process, we expect to be able to maintain ongoing financing activities and collaborator obligations while moving our R&D initiatives and pipeline forward."
On May 19, BIND announced that it had reached an agreement with its secured lender Hercules Technology III, L.P., an affiliate of Hercules Capital. As part of the agreement established under the company's Chapter 11 filing, BIND will, among other requirements, pay down $4 million in principal on the existing loan balance of roughly $12.4 million.
BIND filed a motion for approval of a stalking horse asset purchase agreement bid from Pfizer for the majority of BIND's assets at the beginning of this month.
