By Colin Kellaher

Shares of Clovis Oncology Inc. slid nearly 10% in premarket trading Monday after the biopharmaceutical company said it filed for chapter 11 bankruptcy with plans to auction off its assets.

The Boulder, Colo., company said a unit of Swiss drugmaker Novartis AG has agreed to serve as a so-called "stalking horse" bidder for the rights to its pipeline candidate FAP-2286.

Under the agreement, which is subject to a court-approved bidding process, Novartis would make an upfront payment of $50 million, along with up to $630.8 million in development, regulatory and sales milestones.

Clovis, which last month warned that it might file for bankruptcy amid dwindling cash resources, said it is in active talks with a number of interested parties for a potential sale of one or more of its other assets.

Clovis shares, which closed Friday at 20 cents, were recently down 9.6% at 18.1 cents in premarket trading.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

December 12, 2022 06:39 ET (11:39 GMT)

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