Savient Reaches Agreement On Use Of Cash Collateral
Savient to Seek Court Approval of Final Cash Collateral Order on December 13, 2013
BRIDGEWATER, N.J., Dec. 10, 2013 /PRNewswire/ — Savient Pharmaceuticals, Inc. (NASDAQ: SVNT) (“Savient”) announced today that an agreement in principle has been reached by and among Savient, the Official Committee of Unsecured Creditors appointed in Savient’s Chapter 11 case (the “UCC”) and the Unofficial Committee of Senior Secured Noteholders (the “Unofficial Committee” and, together with Savient and the UCC, the “Parties”), whose members hold approximately 90% of Savient’s senior secured notes (the “Secured Noteholders”). As part of the agreement, it is anticipated that the UCC will withdraw its objection and consent to entry of a final order authorizing Savient’s continued use of cash collateral (the “Final Cash Collateral Order”) by the U.S. Bankruptcy Court for the District of Delaware (the “Court”). The Parties anticipate submitting a proposed Final Cash Collateral Order for consideration and approval by the Court on or before the hearing to consider the Final Cash Collateral Order, currently scheduled to take place on December 13, 2013 (subject to such notice procedures as may be agreed by the Parties). If entered by the Court, the proposed Final Cash Collateral Order would, among other things, provide for the distribution of proceeds from the sale of all or substantially all of Savient’s assets (the “Sale”) and of additional amounts of cash collateral to the Secured Noteholders promptly after the Sale closing. The agreement further contemplates that the UCC would waive its rights to challenge the Secured Noteholders’ liens and claims subject to the implementation of a global settlement between Savient, the UCC and the Unofficial Committee (the “Proposed Settlement”). The Proposed Settlement, which remains subject to documentation and final agreement by the Parties and is to be separately submitted for approval by the Court at a later date, is anticipated to include the following principal terms (but may be amended or modified by agreement of the Parties):
-- $1,775,000 in cash would be used to fund distributions to unsecured creditors under a confirmed plan of reorganization or liquidation (the "Plan") and Court-approved fees and expenses of the UCC's professionals; -- $100,000 in additional cash would be used to pay the fees and expenses of the indenture trustee for Savient's convertible notes; -- 100% of any proceeds received by Savient from a certain pending litigation with a major distribution customer (the "Litigation") would be used to fund distributions to unsecured creditors pursuant to a confirmed Plan; -- If Savient's process to sell all or substantially all of its assets results in a purchase price that exceeds $60 million (such excess amounts, the "Overbid Amounts"), 3% of the first $10 million of any such Overbid Amounts and 4% of any additional Overbid Amounts would be used to fund distributions to unsecured creditors pursuant to a confirmed Plan, subject to an aggregate cap of $750,000; -- Following the cash sweep by the Secured Noteholders under the Final Cash Collateral Order, the amounts referred to in the first four bullets above would be placed in a segregated account and held in trust for the benefit of general unsecured creditors and the Committee pursuant to the Final Cash Collateral Order; -- The Secured Noteholders would receive no distribution on account of any unsecured deficiency claim; -- Any accounts receivable that Savient collects following the closing of the Sale (except for any accounts receivable associated with the Litigation) would be placed in a segregated account for the benefit of the Secured Noteholders; -- Savient's cash collateral budget would include $25,000 per month for the UCC's counsel; -- The UCC or a chapter 7 trustee would have the right to pursue disgorgement or lien avoidance actions against the Secured Noteholders under certain circumstances in the event that the Proposed Settlement were not implemented; and -- The Proposed Settlement would include customary and appropriate release and exculpation provisions.
Additional information, court filings and other documents related to this process, is available through Savient’s claims agent, the Garden City Group, at www.gcginc.com/cases/svnt or 866-297-1238.
Skadden, Arps, Slate, Meagher & Flom LLP and Cole, Schotz, Meisel, Forman & Leonard P.A. are serving as the Company’s legal advisors, and Lazard is serving as its financial advisor.
Stroock & Stroock & Lavan, LLP and Pachulski Stang Ziehl & Jones, LLP are serving as the UCC’s legal advisors, and Mesirow Financial Consulting, LLC is serving as its financial advisor.
KRYSTEXXA® (pegloticase) is a PEGylated uric acid specific enzyme for administration by intravenous infusion. The active substance pegloticase is a covalent conjugate of uricase produced by a genetically modified strain of Escherichia coli and monomethoxypoly (ethylene glycol). KRYSTEXXA was approved in the U.S. in September 2010. KRYSTEXXA is indicated in the U.S. for the treatment of chronic gout in adult patients refractory to conventional therapy. KRYSTEXXA is not recommended for the treatment of asymptomatic hyperuricemia. KRYSTEXXA was approved by the EMA in January 2013 to treat severe, debilitating chronic tophaceous gout.
About Savient Pharmaceuticals, Inc.
Savient Pharmaceuticals, Inc. is a specialty biopharmaceutical company focused on developing and commercializing KRYSTEXXA® (pegloticase) for the treatment of chronic gout in adult patients who do not respond to conventional therapy. Savient has exclusively licensed worldwide rights to the technology related to KRYSTEXXA and its uses from Duke University (“Duke”), which developed the recombinant uricase enzyme used in the manufacture of KRYSTEXXA, and Mountain View Pharmaceuticals, Inc. (“MVP”), which developed the PEGylation technology used in the manufacture of KRYSTEXXA. Each of MVP and Duke have been granted U.S. and foreign patents disclosing and claiming the licensed technology. Savient also owns or co-owns U.S. and foreign patents and patent applications, which collectively form a broad portfolio of patents covering the composition, manufacture and methods of use and administration of KRYSTEXXA. In the U.S., Savient also supplies Oxandrin® (oxandrolone tablets, USP) CIII and co-promotes Kineret® (anakinra) with Swedish Orphan Biovitrum AB (Sobi). For more information, please visit the Company’s website at www.savient.com.
Cautionary Note Regarding Forward-Looking Statements
Certain information in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that are not statements of historical fact, including statements regarding the satisfaction of conditions to the closing of the proposed asset sale, the potential of the proposed asset sale and the expectation that the Chapter 11 filings will enable us to sell our assets in an orderly manner and maximize value for our stakeholders, the necessity of bankruptcy court approvals to conduct and complete the proposed asset sale and other statements regarding our strategy, future operations, future financial positions, future performance, commercialization of KRYSTEXXA, prospects and plans and objectives of management, should be considered forward-looking statements. We often use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “predict,” “will,” “would,” “could,” “should,” “target” and similar expressions to identify forward-looking statements. Actual results or events could differ materially from those indicated in forward-looking statements as a result of risks and uncertainties, including, among others, the potential adverse impact of the Chapter 11 filings on our liquidity or results of operations, changes in our ability to meet financial obligations during the Chapter 11 process or to maintain contracts that are critical to our operations, the outcome or timing of the Chapter 11 process and the proposed asset sale, the effect of the Chapter 11 filings or proposed asset sale on our relationships with third parties, regulatory authorities and employees, proceedings that may be brought by third parties in connection with the Chapter 11 process or the proposed asset sale, Bankruptcy Court approval or other conditions to the proposed asset sale, and the timing or amount of any distributions to the Company’s stakeholders. For a discussion of some of the additional risks and important factors that we believe could cause actual results or events to differ from the forward-looking statements that we make, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013. In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results or events to differ from those contained in any forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. Any forward-looking statements speak only as of the date of this press release. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.
SVNT — G
John P. Hamill, Co- President and Chief Financial Officer / Philip K. Yachmetz, Co-President and Chief Business Officer
Kelly Sullivan / James Golden
Joele Frank, Wilkinson Brimmer Katcher
SOURCE Savient Pharmaceuticals, Inc.