Teva Pharmaceuticals (TEVA) has emerged as the stalking horse bidder for bankrupt BioXcel Therapeutics’ neuroscience portfolio in a deal worth up to $125 million.
Connecticut-based BioXcel filed for Chapter 11 bankruptcy protection after revealing it lacked the funds to sustain operations beyond the end of August.
The company secured a short-term loan earlier in the week but, unable to find a lasting financial solution, ultimately turned to the courts for protection.
After months of efforts to land a deal, Teva emerged as the most viable strategic bidder following extensive due diligence of BioXcel’s assets.
Under the stalking horse agreement, Teva would pay $57.5 million upfront and up to $67.5 million in additional milestone payments, with a good faith deposit of $5.7 million already submitted.
The centrepiece of the deal is BXCL501, an orally dissolving film formulation of dexmedetomidine currently under review at the US Food and Drug Administration.
The FDA is scheduled to rule by November 14 on whether to approve BXCL501 for at-home, acute treatment of agitation associated with bipolar disorders or schizophrenia.
If approved by that deadline, BioXcel would receive the full $67.5 million in milestones, while a later approval by February 27 would trigger a reduced $55 million milestone payment instead.
If ultimately approved, BXCL501 could become the first FDA-approved at-home treatment for agitation linked to those conditions, representing a significant unmet medical need.
BioXcel’s pipeline also includes BXCL701, an oral innate immune activator described as the lead asset in its immuno-oncology programme, though the Teva stalking horse deal focuses exclusively on neuroscience assets.
Teva said the assets align with its focus on acquiring molecules with a clear strategic fit and long-term growth potential, according to a statement from the Israeli drugmaker.
The proposed transaction involves Teva acquiring worldwide rights to the assets, including the dexmedetomidine sublingual film, rather than purchasing BioXcel Therapeutics as a whole company.
Depending on the timing of FDA approval, BioXcel may also be entitled to up to $20 million in commercial milestone payments tied to net sales reaching certain thresholds after closing.
Should Teva not be selected as the successful bidder following the court-supervised auction process, it would be entitled to a break-up fee and expense reimbursement.
Teva, once primarily known as a generics manufacturer, has been aggressively expanding into innovative medicine in recent years, closing a deal in June to purchase neuroscience biotech Emalex Biosciences for up to $900 million.
BioXcel has also filed a series of motions with the court seeking to continue normal operations, including maintaining employee wages and benefits throughout the bankruptcy proceedings.