Oscient Pharmaceuticals files bankruptcy, to sell antibiotic assets

By Caroline Salls

Pittsburgh, July 13 - Oscient Pharmaceuticals Corp. and wholly owned subsidiary Guardian II Acquisition Corp. filed for Chapter 11 bankruptcy Monday in the U.S. Bankruptcy Court for the District of Massachusetts.

Oscient said it has entered into an agreement with a subsidiary of Cornerstone Therapeutics Inc. to sell the assets related to its Factive antibiotic.

Cornerstone until has agreed to pay $5 million plus the value of the drug's inventory at closing and a 15% royalty on its sales of Factive through the fifth anniversary of the closing date.

The sale is subject to a court-supervised auction process and bankruptcy court approval.

Oscient and Guardian said they are continuing to explore strategic alternatives, which include seeking a buyer for their Antara product and other assets.

As of Dec. 31, 2008, Oscient had $174.03 million in total assets and $183.28 million in total debt.

The company's largest unsecured creditors include:

• Indenture trustee U.S. Bank NA of Boston, with a $32.5 million claim for the company's 12.5% convertible guaranteed senior notes due Jan. 15, 2011 and a $12.72 million claim for its 3.50% convertible promissory notes due 2011;

• BB Bioventures LP of South San Francisco, Calif., with a $6.57 million second-lien note claim;

• Abbott of Abbott Park, Ill., with a $5 million claim;

• Maverick Fund, LDC, based in Dallas, with a $4.76 million second-lien note claim;

• Motorlease Corp. of Farmington, Conn., with a $2.54 million contract claim;

• Maverick Fund USA, Ltd., based in Dallas, with a $2.15 million second-lien note claim;

• Ethypharm SA of Saint Cloud, France, with a $1.58 million contract claim;

• United Health Group of Minneapolis, with a $1.56 million rebate claim;

• Medco Health Solutions Inc. of Franklin Lakes, N.J., with a $1.29 million rebate claim; and

• Rx Solutions Inc. of Cypress, Calif., with a $1.1 million rebate claim.

In addition, Oscient said its common stock will be delisted from the Nasdaq Stock Market, effective July 21, for failure to pay specified fees.

The company does not plan to appeal the decision.

Oscient is a Waltham, Mass., commercial-stage pharmaceutical company. Its Chapter 11 case number is 09-16576.

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