Savient Pharmaceutials was finally able to woo some buyers and stoke up its price. Unfortunately, all that action took place in bankruptcy.
Bridgewater, NJ-based Savient said today that it’s reached a deal to sell itself to Crealta Pharmaceuticals, a recently-created specialty pharmaceutical company based in Lake Forest, IL. Crealta has agreed to pay $120.4 million to acquire Savient and most notably, its troubled gout drug pegloticase (Krystexxa).
Crealta’s offer is the winning bid in an auction under the auspices of Chapter 11 protection, which corporate entities often use to reorganize their finances or sell themselves to pay creditors. Savient actually filed for bankruptcy in October with what’s known as a “stalking horse,” or lead bid, in place from St. Matthews, KY-based US World Meds. That $55 million offer serves as the starting point for an auction.
Savient, which couldn’t find a buyer outside of bankruptcy a few years back, finally got its wish—granted, at price points much lower than it likely envisioned in 2010. Crealta, created in August by private equity firm GTCR, is ready to pay more than double the amount US World Meds originally intended to buy it for. As with all things in Chapter 11, however, a bankruptcy judge has to approve the deal before it can take effect. There will be a hearing on Friday on the matter.
Should the deal go through, Crealta will get a chance to turn around a drug that never met its expectations. Pegloticase, a twice-monthly infusion for patients with severe cases of gout that don’t respond to conventional treatments, was approved by the FDA in September 2010, but never generated the numbers the company was hoping for. The drug’s struggles ultimately landed Savient in Chapter 11 in October.
Savient, for its part, said in legal papers that it severely miscalculated the market for the drug. As a result, it had to drive up the price of the drug several times: it now sells for $5,390 per vial, or more than $30,000 for the estimated three-month treatment regimen. The company has also never been able to tap into the European market because of reimbursement issues. All told, Savient only sold about $33.6 million of pegloticase between its launch and June 30, compared to a $141 million tab for marketing and sales costs since the FDA approved the drug.