Achaogen OK’d to enter letter of intent to sell intellectual property

By Caroline Salls

Pittsburgh, Oct. 31 – Achaogen, Inc. received court approval to enter into a 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 Thursday with the U.S. Bankruptcy Court for the District of Delaware.

XuanZhu will 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.

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