Make earnings with no risk
Automated AI-driven system makes the trades, you earn the money
Join now
News

Novan Shares Plummet as Company Enters Chapter 11 Bankruptcy

0

Novan, a pharmaceutical company, has announced that it has entered into a stalking horse asset purchase agreement with Ligand Pharmaceuticals as it files for relief under chapter 11 of the U.S. Bankruptcy Code in Delaware. This news has led to a significant drop in Novan’s shares, with prices reaching a new 52-week low at just 21 cents. In the past year alone, the company’s stock price has fallen by a staggering 91%.

Despite these challenges, Novan will continue to operate its business as a “debtor-in-possession” under the supervision of the bankruptcy court. To ensure the company’s stability during this time, Novan has also secured a $15 million credit facility with Ligand. However, it’s important to note that the cash payable at closing will be reduced by the outstanding balance of the credit facility, which will be repaid upon closure.

Approval from the bankruptcy court is necessary for this transaction to proceed. Additionally, Novan has obtained a $3 million bridge loan from Ligand prior to filing for bankruptcy. This loan has provided much-needed working capital for the company’s general corporate purposes and is secured by Novan’s assets. Once approved by the Bankruptcy Court, this bridge loan will be consolidated into the DIP credit facility.

Despite these financial difficulties, Novan remains committed to working with the U.S. Food and Drug Administration (FDA) to potentially gain approval for its berdazimer gel, which has a PDUFA goal date of Jan. 5, 2024. The company has recently received its mid-cycle review communication from the FDA, along with positive results from the manufacturing facility’s pre-approval inspection and establishment inspection report.

In light of these developments, Novan has engaged Raymond James & Associates to explore its strategic options moving forward. This includes considering the sale of the company’s assets as part of the chapter 11 proceedings.

Although this is a challenging time for Novan, the company remains focused on navigating the bankruptcy process while actively working towards achieving regulatory approval for its promising berdazimer gel.

fxcoach

Bank of America Awaits Q2 Earnings

Previous article

Virgin Wines UK Reports Fiscal 2023 Performance

Next article

You may also like

Comments

Leave a reply

Your email address will not be published.

More in News