Eiger BioPharmaceuticals, Inc., a biopharmaceutical company, has announced a significant development in its ongoing Chapter 11 bankruptcy proceedings. According to a recent SEC filing, the company filed a proposed Joint Plan of Liquidation and a Disclosure Statement with the United States Bankruptcy Court for the Northern District of Texas on Monday.
Under the proposed Chapter 11 Plan, all equity securities of Eiger BioPharmaceuticals will be canceled and extinguished. Equity holders are set to receive their proportionate share of cash from the Existing Equity Interest Recovery Pool (NASDAQ:POOL), as defined in the Chapter 11 Plan. This move will effectively wipe out the current equity stakes of shareholders.
The company's securities, which were suspended from trading on The Nasdaq Stock Market LLC on April 11, 2024, and are currently trading on the OTC Pink Marketplace under the symbol "EIGRQ", are cautioned to be highly speculative. The company warns that trading prices may not reflect the actual recovery, if any, for holders in the Chapter 11 Cases, suggesting that investors could face a significant or total loss of their investment.
A hearing to discuss the approval of the Disclosure Statement and the confirmation of the Chapter 11 Plan is scheduled for July 29, 2024. The deadline for objections to the company’s classification of claims and equity interests as “unimpaired” under the Chapter 11 Plan is also set for the same day.
The contents of the proposed Chapter 11 Plan and Disclosure Statement are subject to change and should not be relied upon by any party until finalized. The company emphasizes that this report is not an invitation to accept or reject the proposed Chapter 11 Plan and Disclosure Statement, and any solicitation will be made under the final approved documents and applicable law.
This news is based on information contained in a recent SEC filing by Eiger BioPharmaceuticals.
In other recent news, Eiger BioPharmaceuticals, Inc. has finalized the sale of its Avexitide asset to Amylyx Pharmaceuticals, Inc., a transaction valued at $35.1 million, excluding determined cure costs and assumed liabilities. This significant move follows Eiger's voluntary filing for Chapter 11 bankruptcy protection.
Amylyx emerged as the successful bidder for the Avexitide asset in a court-supervised auction process, with the sale authorized by the United States Bankruptcy Court for the Northern District of Texas.
Amylyx Pharmaceuticals will now assume responsibility for the development and commercialization of the Avexitide asset. This transaction marks a crucial step in Eiger's ongoing bankruptcy proceedings, indicating a pivotal moment as the company aims to satisfy its obligations to creditors.
As Eiger navigates through bankruptcy, the company has issued a caution to its security holders about the speculative nature and significant risk associated with trading in Eiger's securities during the Chapter 11 process.
InvestingPro Insights
In light of Eiger BioPharmaceuticals' recent developments, investors are keenly observing the company's financial health and stock performance. Real-time data from InvestingPro shows a market capitalization of $18.66 million, with a significant revenue growth of 41.06% in Q1 2023 compared to the previous quarter. Despite this growth, the company's operating income margin remains deeply negative at -455.12% for the last twelve months as of Q1 2023.
InvestingPro Tips highlight that Eiger BioPharmaceuticals is quickly burning through cash and has short-term obligations that exceed its liquid assets. Additionally, analysts do not anticipate the company will be profitable this year, which aligns with the company's current bankruptcy proceedings and the potential total loss for equity holders. These factors underscore the speculative nature of the company's OTC stock, EIGRQ.
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