NEW YORK, Dec. 12, 2018 /PRNewswire/ -- Synergy
Pharmaceuticals Inc. (NASDAQ: SGYP) (the "Company" or "Synergy"), a
biopharmaceutical company focused on the development and
commercialization of novel gastrointestinal (GI) therapies, today
announced an agreement with Bausch Health Companies Inc., through
which Bausch Health would acquire substantially all of Synergy's
assets, including all rights to TRULANCE® (plecanatide),
dolcanatide and related intellectual property, for approximately
$200 million in cash, subject to
certain adjustments at closing, plus the assumption of certain
liabilities related to the assets to be acquired. The sale is
subject to a competitive process and the Company's receipt of
higher and better offers.
To facilitate the sale and address its debt obligations, Synergy
initiated voluntary proceedings under Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern
District of New York. The Company
fully intends to operate its business as usual while it works to
complete the sale through the Chapter 11 process.
"We have worked diligently to serve our patients, health care
professionals and other stakeholders by bringing TRULANCE® to
market and developing other GI therapies to address previously
unmet needs. Unfortunately, we have now reached a point where our
financial challenges are preventing us from taking this important
work to the next level," said Troy
Hamilton, Chief Executive Officer of Synergy Pharmaceuticals
Inc. "We are pleased to reach this agreement with Bausch Health and
to move forward with the court-supervised auction process. We are
confident that this process will result in a strong new owner that
has the necessary funding and commercialization capabilities to
continue providing TRULANCE to the patients and providers who have
come to rely on this treatment and will allow us to maximize value
for all stakeholders. We thank our employees for their
continued hard work, dedication and commitment to serving our
health care professionals and their patients."
Synergy has entered into a binding term sheet with its existing
first lien lenders for debtor-in-possession (DIP) financing in an
aggregate principal amount equal to $155
million, comprised of $110
million of roll up pre-petition loan obligations and
$45 million of new money loans to
support operations during the Chapter 11 and sale process. This
financing, combined with existing cash on its balance sheet and
normal operating cash flows, will allow Synergy to operate its
business as usual and help fund its ongoing financial commitments
while it works to complete the sale. The Company also has filed
customary motions with the Court seeking authorization to continue
employee wages and benefit programs, honor future vendor payments
and maintain customer programs in the normal course in addition to
certain other relief.
The proposed sale to Bausch Health is expected to be conducted
through a supervised sale process under Section 363 of the
Bankruptcy Code and will be subject to Court-approved bidding
procedures, receipt of higher and better offers at auction and
approval of the Court. As part of the sale through the
Chapter 11 process, Synergy and its advisors will evaluate
competing bids that may be submitted in order to ensure the Company
receives the highest and best offer for its assets. The agreement
with Bausch Health comprises the initial stalking horse bid in the
Court-supervised auction process. Synergy aims to complete this
process by the end of the first quarter of 2019. The agreement will
be filed with the Securities and Exchange Commission.
Additional information about Synergy's Chapter 11 cases can be
found at https://cases.primeclerk.com/Synergy.
Synergy is advised in this transaction by Skadden, Arps, Slate,
Meagher & Flom LLP, Sheppard, Mullin, Richter & Hampton
LLP, Centerview Partners and FTI Consulting.
Forward-Looking Statements
This press release contains forward-looking statements, which
are based on our current expectations, estimates, and projections
about the businesses and prospects of the Company and its
subsidiaries ("we" or "us"), as well as management's beliefs, and
certain assumptions made by management. Words such as
"anticipates," "expects," "intends," "plans," "believes," "seeks,"
"estimates," "may," "should," "will" and variations of these words
are intended to identify forward-looking statements. Such
statements speak only as of the date hereof and are subject to
change. The Company undertakes no obligation to revise or update
publicly any forward-looking statements for any reason. These
statements are not guarantees of future performance and are subject
to certain risks, uncertainties, and assumptions that are difficult
to predict. Forward-looking statements discuss, among other
matters: our financial and operational results, as well as our
expectations for future financial trends and performance of our
business in future periods; our strategy; risks and uncertainties
associated with Chapter 11 proceedings; the negative impacts on our
businesses as a result of filing for and operating under Chapter 11
protection; the time, terms and ability to confirm a Chapter 11
plan of reorganization for our businesses; the adequacy of the
capital resources of our businesses and the difficulty in
forecasting the liquidity requirements of the operations of our
businesses; the unpredictability of our financial results while in
Chapter 11 proceedings; our ability to discharge claims in Chapter
11 proceedings; negotiations with the holders of our indebtedness
and our trade creditors; risks and uncertainties with performing
under the terms of the debtor-in-possession ("DIP") financing
arrangements and any other arrangement with lenders or creditors
while in Chapter 11 proceedings; the Company's ability to operate
our businesses within the terms of our respective DIP financing
arrangements; the forecasted uses of funds in the
Company's DIP budgets; our ability to conduct
business as usual in the United
States and worldwide; our ability to continue to serve
customers, suppliers and other business partners at the high level
of service and performance they have come to expect from us; our
ability to continue to pay suppliers and vendors; our ability
to fund ongoing business operations through the applicable DIP
financing arrangements; the use of the funds anticipated to be
received in the DIP financing arrangements; the ability to
control costs during Chapter 11 proceedings; the risk that our
Chapter 11 Cases may be converted to cases under Chapter 7 of the
Bankruptcy Code; the ability of the Company to preserve and utilize
the NOLs following Chapter 11 proceedings; the Company's ability to
secure operating capital; the Company's ability to take advantage
of opportunities to acquire assets with upside potential; the
Company's ability to execute on its strategic plan to evaluate and
close potential M&A opportunities; our long-term outlook; our
preparation for future market conditions; and any statements or
assumptions underlying any of the foregoing. Such statements are
not guarantees of future performance and are subject to certain
risks, uncertainties, and assumptions that are difficult to
predict. Accordingly, actual results could differ materially and
adversely from those expressed in any forward-looking statements as
a result of various factors.
Important factors that may cause such differences include,
but are not limited to, the decisions of the Court; negotiations
with our debtholders, our creditors and any committee
approved by the Court; negotiations with lenders on the
definitive DIP financing documents; the Company's ability to meet
the closing conditions of its DIP financing; the Company's ability
to meet the requirements, and compliance with the terms, including
restrictive covenants, of their respective DIP financing
arrangements and any other financial arrangement while in Chapter
11 proceedings; changes in our operational or cash needs from the
assumptions underlying our DIP budgets and forecasts; changes in
our cash needs as compared to our historical operations or our
planned reductions in operating expense; adverse litigation;
changes in domestic and international demand for TRULANCE; our
ability to control operating costs and other expenses; that general
economic conditions may be worse than expected; that competition
may increase significantly; changes in laws or government
regulations or policies affecting our current business operations
and, as well as those risks and uncertainties disclosed under the
sections entitled "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in our
Forms 10-Q filed with the Securities and Exchange Commission
("SEC") on May 10, 2018, August 8, 2018 and November 9, 2018 and Form 10-K filed with the SEC
on March 1, 2018, and similar
disclosures in subsequent reports filed with the SEC.
About Synergy Pharmaceuticals
Synergy is a biopharmaceutical company focused on the
development and commercialization of novel gastrointestinal (GI)
therapies. The company has pioneered discovery, research and
development efforts around analogs of uroguanylin, a naturally
occurring human GI peptide, for the treatment of GI diseases and
disorders. Synergy's proprietary GI platform includes one
commercial product TRULANCE® (plecanatide) and a second product
candidate - dolcanatide. For more information, please visit
www.synergypharma.com.
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SOURCE Synergy Pharmaceuticals Inc.