The decision to file Chapter 11 followed a close examination of the company’s strategic options and current financing.
One year ago, startup NPXe Limited and Mallinckrodt were enrolling patients in a Phase III trial to assess the efficacy of its xenon gas for neuro- and cardio-protection and improvement in survival for post-cardiac arrest syndrome (PCAS). Now, the company has filed for bankruptcy and its development partner is eying bankruptcy.
On Monday, Buffalo, N.Y.-based NPXe, formerly known as NeuroproteXeon, filed a voluntary petition to reorganize under Chapter 11 of the Bankruptcy Code and is also seeking permission to auction off its assets. NPXe has been developing Xenex, a xenon gas for inhalation in development to treat PCAS. Even though the company is looking to sell off assets, Chief Executive Officer Bill Burns believes that Xenex can be brought to market and serve as a potential treatment for PCAS patients.
“Inhaled Xenon gas has a history of safe use in humans, and based on Phase II data, we believe bringing Xenex to market represents an essential element for critical care treatment for PCAS patients, a population in which no approved pharmacotherapy exists,” Burns said in a statement Monday.
The decision to file Chapter 11 followed a close examination of the company’s strategic options and current financing. The company’s board of directors unanimously agreed that a “structured sale process” represents the best path forward for the company. The company retained Lincoln International as its banking advisor. Lincoln International will manage the sale and auction process, which is expected to be concluded by the Feb. 26. Bids for the assets are expected by Feb. 19 and the auction will begin no later than Feb. 21, the company announced.
In preparation for the sale of its assets, NPXe provided a brief list of highlights to entice potential buyers. It pointed to positive Phase II data for Xenex, which showed the inhaled gas “demonstrated neuro- and cardio-protection with a significant reduction in white matter brain damage and a suggested improvement in survival outcomes.” The company said there is a solid market for the therapeutic, given the fact there are more than 286,000 addressable cardiac arrests in North America and the European Union each year. The company added that there are potential opportunities for Xenex in other indications, such as stroke and traumatic brain injury. Additionally, Xenex has received Fast Track designation and Special Protocol Assessment for the Phase III trial.
PCAS is a range of complications that affect the brain and heart following ischemia after a heart attack. There is no approved pharmacotherapy for neuroprotection for PCAS. There are approximately 140,000 potential cardiac arrest patients in the U.S. and 145,000 in Europe each year who may be eligible for xenon gas treatment, if approved.
Mallinckrodt, which licensed the Xenon gas asset in 2017, is also facing its own financial cliff. The company is eying potential bankruptcy due in part to legal liabilities related to opioid lawsuits in the United States, as well as a debt load of $5 billion. In September, the U.K.-based company hired advisers to assist it in its potential restructuring.
