Achaogen intellectual property sale letter amended amid negotiations

By Caroline Salls

Pittsburgh, Nov. 27 – Achaogen, Inc. entered into an amendment to its letter of intent under which XuanZhu (HK) Biopharmaceutical Ltd. will acquire some of Achaogen’s intellectual property and technical rights for the active pharmaceutical ingredient Plazomicin Sulfate in China, Hong Kong, Macau and Taiwan, according to an order filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

The amendment extends the duration of the break-up fee and expense reimbursement provisions included in the letter of intent to the earliest of Dec. 31, the date XuanZhu delivers a notice of termination and the date the bankruptcy court denies approval of the transaction.

Achaogen said the parties agreed to the amendment as a result of continuing negotiations regarding the terms of a definitive and related documentation.

As previously reported, XuanZhu agreed to pay $4.5 million as a royalty advance for the license of the intellectual property, payable as a $1 million deposit into escrow upon execution of the letter of intent, $1 million as a deposit into escrow upon execution of a definitive agreement and $2.5 million at closing.

If Achaogen completes an alternative transaction, XuanZhu will be paid $200,000 as an expense reimbursement, plus a $135,000 break-up fee.

The South San Francisco-based biopharmaceutical company filed bankruptcy on April 15, 2019. The Chapter 11 case number is 19-10844.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.