May 20, 2019
We were right and we were wrong. Back in November 2018, in “😬Biopharma is in Pain😬 ,” we snidely wrote, “Do Pills Count as ‘Healthcare’? Short Biopharma” riffing on the common trope that healthcare was a hot spot for restructuring activity.* No, we argued: the activity is really in publicly-traded biopharma companies with little to no sales, too much debt (and usually busted convertible notes) and attractive intellectual property. We went on to predict that Synergy Pharmaceuticals Inc. ($SGYP) and Aegerion Pharmaceuticals Inc. (a subsidiary of Novelion Therapeutics Inc. ($NVLN)) would both file for bankruptcy. Ding ding!!! We were right.** The former filed back in December and, now, the latter is also in bankruptcy court. Of course, with respect to the latter, we also wrote, “[c]ome February — if not sooner — it may be in bankruptcy court.” But let’s not split hairs.***
The company manufactures two approved therapies, JUXTAPID and MYALEPT, that treat rare diseases. On Sunday, we’ll discuss the future of these therapies and what the company seeks to achieve with this restructuring.
*To be fair, the healthcare space has, indeed, picked up in activity since then.
**For what it’s worth, we also predicted that Orchids Paper Products Company ($TIS) would be in bankruptcy soon, writing “This company doesn’t produce enough toilet paper to wipe away this sh*tfest. See you in bankruptcy court.” Three for three: this is precisely why — wait for the shameless plug — you should become a PETITION Member today.
***Maturity of the bridge loan was initially February 15, 2019 but the debtors had a right to extend, which they did.
Jurisdiction: Southern District of New York (Judge )
Capital Structure: $36.1mm 8% PIK ‘19 secured Novelion Intercompany Loan, $73.8mm Bridge Loan (Highbridge Capital Management LLC and Athyrium Capital Management LP), $304mm 2% unsecured convertible notes (The Bank of New York Mellon Trust Company NA)
Legal: Willkie Farr & Gallagher LLP (Paul Shalhoub, Andrew Mordkoff)
Financial Advisor/CRO: AlixPartners LLP (John Castellano)
Investment Banker: Moelis & Co. (Barak Klein)
Claims Agent: Prime Clerk LLC (*click on the link above for free docket access)
Other Parties in Interest:
DIP Agent: Cantor Fitzgerald Securities
Ad Hoc Group of Convertible Noteholders
Legal: Latham & Watkins LLP & King & Spalding LLP
Financial Advisor: Ducera Partners LLC
Legal: Goodwin Proctor LLP & Norton Rose Fulbright Canada LLP
Financial Advisor: Evercore