BioXcel filed for Chapter 11 with Teva already signed up as the floor bidder, and most of what Teva might pay depends on an application the FDA has not decided

Fifty seven and a half million dollars is the floor. The ceiling is $145m, and $87.5m of that turns on a decision the Food and Drug Administration has not yet made.

BioXcel Therapeutics filed voluntary petitions on Thursday in the United States Bankruptcy Court for the District of Delaware, together with its subsidiaries OnkosXcel Therapeutics and OnkosXcel Employee Holdings. The three cases will be jointly administered. The company disclosed the filing in a Form 8-K accepted at half a minute past six on Friday morning, and nothing is attached to it. No press release, no exhibit. The filing is the announcement.

Teva has agreed to be the stalking horse.

The price is mostly not cash

Under an asset purchase agreement signed on Thursday, Teva Pharmaceuticals International GmbH would take substantially all of the assets and assume certain specified liabilities for $57.5m in cash. Above that sit up to $67.5m of development milestone payments, tied to the outcome and the timing of the pending supplemental new drug application for at-home use of IGALMI, and up to $20m of commercial milestones that depend on net sales passing thresholds after closing. Teva Pharmaceutical Industries Limited guarantees the milestone obligations, for the purposes of section 9.16 of the agreement only.

Add the three together and the ceiling is $145m, of which $87.5m is contingent.

That agreement is a floor rather than a sale. Teva's offer is the minimum bid in an auction the company has asked the court to run under section 363, and a motion filed on Thursday seeks approval of the bidding procedures, of the stalking horse designation, and of bid protections for the stalking horse. Either side may terminate if the transaction has not closed by 30 October.

The money keeping the lights on comes from the existing lenders

Debtor-in-possession financing is expected to come from affiliates of Oaktree Capital Management and the Qatar Investment Authority, which are the same parties, or affiliates of them, behind the April 2022 credit agreement that was amended as recently as 24 August. Two numbers describe it. New money commitments run to $19m, drawn in two tranches of up to $9.5m each, the first on the interim order and the second on the final one. Roll-up loans run to $58.25m, converting prepetition debt dollar for dollar into obligations under the new facility.

So the roll-up is a little over three times the new cash.

The company also appointed Samir Saleem as chief restructuring officer. He reports to a strategic process committee of the board, and the filing records that the committee was itself constituted under the prepetition credit agreement.

What the filing does not carry

It does not attach the purchase agreement, which the company says will be filed later as an exhibit to an amendment of this current report. It gives no employee count, no schedule of liabilities and no figure for cash on hand. It says nothing about the Nasdaq listing. Court documents are being made available through Stretto, the claims and noticing agent.