Ligand Pharmaceuticals Inc. (NASDAQ: LGND) has made a remarkable offer to acquire the assets of Novan, Inc. (Nasdaq: NOVN). Their offer of a $15 million cash payment and up to $15 million DIP financing inclusive of a $3 million bridge loan already funded provides an opportunity to preserve and maximize the value of Novan’s commercial business and its cutting-edge berdazimer gel development assets.
The successful NDA of the berdazimer gel for molluscum contagiosum infection has a FDA PDUFA goal date of January 5, 2024, with milestone and royalty rights acquired by Ligand in 2019. If Ligand’s bid is the successful bid in the anticipated bankruptcy sale and auction process, it will see to out license or sell the existing development programs and commercial business assets of Novan, as is the model of Ligand.
Discover the terms of this exciting transaction! Here’s what you need to know:
Ligand is making a bold move with its $15 million bid to acquire Novan, including its coveted berdazimer gel, other highly-developed programs, the innovative NITRICIL™ drug delivery technology, and the commercial assets of its EPI health business. A smart decision for the future, Ligand is positioning itself to make a major impact in the industry.
Subject to court approval, Novan has been granted a $15 million secured DIP loan, which includes a $3 million bridge financing loan that was previously extended by Ligand. This loan will be used to help repay for Novan’s assets and will be drawn down during its bankruptcy cases.
Novan will be taking on a $15 million DIP loan that carries a hefty annual interest rate of 12%, with the stakes even higher if repayments are not met as the interest rate can increase up to 6%.
If the court accepts a bid from a different party for the assets of Novan, Ligand’s DIP loan will be repaid. Further, Ligand expects that its milestone and royalty rights will be retained. This is an opportunity for both Novan and Ligand to move forward in a positive direction with their respective businesses.
The long-awaited completion of the transaction is expected to take place in the third quarter of 2023, bringing an end to the anticipation of its closure.
Ligand has made significant strides in the first half of the year by sharpening its capabilities and expertise in credit, reorganization and operations. These improvements have positioned the business to take full advantage of potential opportunities such as the proposed acquisition of Novan’s assets, proving once again that Ligand is a master at finding and investing in attractive assets that are in special situations and maximizing value for shareholders. Under the leadership of CEO Todd Davis, the company continues to strive to make the most out of value-adding transactions.
Ligand’s President and COO, Matt Korenberg, is confident that berdazimer gel will be approved and become an effective treatment for molluscum contagiosum. Currently, no FDA-approved drug exists for this common skin disease, but, if all goes according to plan, berdazimer gel will be the first self-application topical treatment, offering much-needed relief to sufferers.
Ligand is being supported by Birch Lake, acting as their financial advisor and Morgan Lewis as their legal advisor, as they embark on this exciting new transaction.
About Ligand Pharmaceuticals
Ligand is committed to enabling scientific advancement through the clinical development of high-value medicines. We strive to offer investors the opportunity to participate in the promise of the biotech industry in a profitable, diversified manner.
To achieve this, our business model provides financing or licensing of our platform technologies, such as Captisol and Pelican Expression Technology, to create a diversified portfolio of biotech and pharmaceutical product revenue streams.
We have established multiple alliances, licenses, and other business relationships with the world’s leading pharmaceutical companies, including Amgen, Merck, Pfizer, Jazz, Takeda, Gilead Sciences, and Baxter International, to leverage our capabilities and optimize drug solubility and stability. Invest in the future of biopharmaceuticals with Ligand and join our mission of making life-saving medicines available to those who need them most.