Description
Eiger Pharmaceuticals is a clinical stage biopharmaceutical company focused on developing and commercializing innovative treatments for rare and ultra-rare diseases. Despite its promising pipeline, the company faced significant financial challenges that culminated in filing for Chapter 11 liquidation.
The company recently completed 2 sales of their core assets: 1) Avexitide a GLP-1 antagonist drug that helps treat low blood sugar and 2) Zokivny the first and only treatment approved by the U.S. Food and Drug Administration (FDA) to target the cause and symptoms of progeria, also known as Hutchinson-Gilford progeria syndrome (HGPS) and processing-deficient progeroid laminopathies (PDPL), in young people 12 months of age and older. Collectively known as progeria, HGPS and PDPL are ultra-rare, fatal, genetic premature aging diseases that accelerate mortality in young patients. With the sale of these assets, a recovery for the equity has been crystalized.
The current capital structure and waterfall are as follows:
Total debt in default: $42,038,392
Other creditor claims: $9,301,621
Additional creditor claims: $2,800,000
Total liabilities: $54,140,013
Cash remaining: $10,315,591
Deposits and Prepayments and receivables: $14,890,011
Zokivny Asset sale: $46,100,000
Avexitide Asset sale: $34,700,000
Recovery Value for Equity: $51,865,589
Deducting assumed interim legal expenses for Chapter 11 of $3.1mm AND $3.6mm (a go forward burn rate of $150,000 per month for the next 24 months), I estimate a net equity recovery of $45,765,589 or $30.51 per share.
This value does not include 2 remaining assets, the sale of which the court is postponing for a later date. These assets include IFN-Lamda and Lonafarnib/Ritonavir both for treatment of hepatitis delta virus(HDV).
IFN-Lambda, also known as Peginterferon Lambda, is one of Eiger Pharmaceuticals' investigational drugs. Peginterferon Lambda is a type of interferon that targets the interferon lambda receptors, which are primarily found on epithelial cells in tissues such as the liver, lungs, and intestines. This specificity is intended to offer antiviral effects with potentially fewer side effects compared to other types of interferons that act more broadly.
Eiger Pharmaceuticals has been developing Peginterferon Lambda for the treatment of HDV, which is a severe form of viral hepatitis associated with significant morbidity and mortality. The drug has shown promise in clinical trials for its antiviral activity against HDV and has met its Phase 3 endpoints.
Additionally, there is an intercompany loan between Eiger and its European subsidiary in the amount of $13.1mm. The European facility has finish goods inventory of roughly $7.7mm. It is unclear whether this inventory has been included in the recent asset sale(s). I would imagine it has. But in the event that it has not, this amount should be included in the waterfall.
I do not hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise do not hold a material investment in the issuer's securities.
Catalyst
This is a very underfollowed situation.