Orexigen Therapeutics Inc. filed for Chapter 11 bankruptcy protection and will look to sell the company.
The drugmaker will file a motion to pursue an auction and sale process of substantially all its assets.
The proposed bidding procedures, if approved by the U.S. Bankruptcy Court for the District of Delaware, would require interested parties to submit binding offers to acquire substantially all of Orexigen's assets, which would be purchased free and clear of the company's indebtedness and other liens and interests.
Proposed bids for the company are expected to be submitted by May 21, while the auction process is expected to start no later than May 24. The sale process is intended to be completed by July 2.
A number of Orexigen's senior secured noteholders have made a $35 million financing commitment. The commitment will provide the company with sufficient liquidity to conduct its business in an uninterrupted manner, fund its Chapter 11 case, including the sale of its assets, and to continue to meet its operational and financial obligations.
The San Diego-based company has also filed a motion with the court to establish limitations on trading in Orexigen's common stock by owners of at least 4.5% of the company's common stock while the bankruptcy proceedings are underway.
Orexigen's legal counsel is Hogan Lovells US LLP and its financial advisers are Perella Weinberg Partners LP and Ernst & Young LLP.
