It was all downhill for Savient ($SVNT) after winning approval for gout drug Krystexxa in September 2010. Now, the company may have hit rock bottom. Monday, the biotech said it had filed for bankruptcy in a Delaware court, agreeing to sell off most of its assets for about $55 million.
According to a company filing, US WorldMeds subsidiary Sloan Holdings has put down that price as a "leading horse" bid for Savient. As Reuters notes, that offer could still be topped by others. The company listed total assets of about $74 million and liabilities totaling $260 million as of June 30, according to court documents seen by the news service. Shares of the Bridgewater Township, NJ-based company closed at 57 cents Monday after plummeting 47% this year.
Krystexxa will remain on the market, though how much commercial benefit comes with it is questionable. After struggling to get the drug approved, Savient lacked the funding for a major launch but figured it could sell itself off instead. It proved to be a misguided assumption: While rumors listed the likes of Abbott Laboratories ($ABT), Pfizer ($PFE) and Amgen ($AMGN) as potential suitors, ultimately no buyers came calling.
So the company launched Krystexxa solo, selling $125 million in convertible senior notes to finance the project. But after its much-hyped approval, the drug failed to attract significant sales, generating only $1.4 million in the first half of 2011; by year's end, Savient was grappling with $102 million in losses on just $3.1 million in revenue. Layoffs and cost-trimming efforts since then have failed to dig it out of that hole.
This isn't the first time "Savient" and "bankrupt" have appeared in the same sentence. In May 2012, hedge fund Tang Capital, a Savient shareholder, asked a court to declare the company insolvent. Ironically, former CEO John Johnson, who presided over the bungled launch, had already taken up the helmsman's post at cancer vaccine maker Dendreon ($DNDN) by that time, where he currently serves. This May, one analyst set a $0 stock price target for that company, claiming it's headed for bankruptcy itself.
Special Report: 10 top drug launch disasters - Krystexxa