NAVIDEA BIOPHARMACEUTICALS, INC. (NYSEMKT:NAVB) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
| Entry into a Material Definitive Agreement. |
On November 23, 2016, Navidea Biopharmaceuticals, Inc. (the
Company) entered into an Asset Purchase Agreement (the Purchase
Agreement) with Cardinal Health 414, LLC, a Delaware limited
liability company (Cardinal). to the Purchase Agreement, Cardinal
will acquire the Companys assets used, held for use, or intended
to be used in operating its business of developing, manufacturing
and commercializing a product used for lymphatic mapping, lymph
node biopsy, and the diagnosis of metastatic spread to lymph
nodes for staging of cancer (the Business), including the
Companys radioactive diagnostic agent marketed under the
Lymphoseek trademark for current approved indications by the
Federal Drug Administration (FDA) and similar indications
approved by the FDA in the future (the Business Product), in
Canada, Mexico and the United States (the Territory) (giving
effect to the license-back described below and excluding certain
assets specifically retained by the Company) (the Asset Sale).
Such assets to be acquired in the Asset Sale consist primarily
of, without limitation, (i) intellectual property used in or
reasonably necessary for the conduct of the Business, (ii)
inventory of, and customer, distribution, and product
manufacturing agreements related to, the Business, (iii) all
product registrations related to the Business Product, including
the new drug application approved by the FDA for the Business
Product and all regulatory submissions in the United States that
have been made with respect to the Business Product and all
Health Canada regulatory submissions and, in each case, all files
and records related thereto, (iv) all related clinical trials and
clinical trial authorizations and all files and records related
thereto, and (v) all right, title and interest in and to the
Business Product, as specified in the Purchase Agreement (the
Acquired Assets). In exchange for the Acquired Assets, Cardinal
agreed to (i) make a cash payment to the Company at closing of
$80 million (reduced by an aggregate of approximately $64.5
million of indebtedness to be repaid to Capital Royalty Partners
II, L.P. and Platinum-Montaur Life Sciences LLC and its
affiliates on behalf of the Company, the amount by which, if any,
transferred Business Product inventory is less than $6 million,
and estimated transaction costs of $600,000), (ii) assume certain
liabilities of the Company associated with the Business Product
as specified in the Purchase Agreement, and (iii) make periodic
earnout payments (to consist of contingent payments and milestone
payments which, if paid, will be treated as additional purchase
price) to the Company based on net sales derived from the
purchased Business Product subject, in each case, to Cardinals
right to off-set. In no event will the sum of all earnout
payments, as further described in the Purchase Agreement, exceed
$230 million over a period of ten years, of which a cumulative
amount of $20.1 million are guaranteed payments for the three
years immediately after closing of the Asset Sale.
The Purchase Agreement contains customary representations and
warranties made by the Company and Cardinal. The Company has also
agreed to comply with covenants during the interim period between
the date of the execution of the Purchase Agreement and the date
of consummation of the Asset Sale. In addition, the Purchase
Agreement provides that the parties will indemnify each other for
breaches of these representations, warranties and covenants,
subject to certain limitations, and for certain other matters.
Under the Purchase Agreement, the Company agreed, subject to
certain exceptions, for a period of five years after closing of
the Asset Sale, to certain non-competition restrictions with
respect to the Business (including marketing any products for
unapproved uses that allow such products to compete with the
Business Product) in the Territory.
At the closing of the Asset Sale, the parties will enter into a
License-Back Agreement (License-Back) to which Cardinal will
grant to the Company a sublicensable (subject to conditions) and
royalty-free license to use certain intellectual property rights
included in the Acquired Assets and owned by Cardinal as of the
closing of the Asset Sale to the extent necessary for the Company
to (i) on an exclusive basis, subject to certain conditions,
develop, manufacture, market, sell and distribute new
pharmaceutical and other products that are not Competing Products
(as defined in the License-Back), and (ii) on a non-exclusive
basis, develop, manufacture, market, sell and distribute the
Business Product throughout the world other than in the
Territory. The License-Back also restricts Cardinal from using
the intellectual property rights included in the Acquired Assets
and owned by Cardinal as of the closing of the Asset Sale to
develop, manufacture, market, sell, or distribute any product
other than the Business Product or other product that (a)
accumulates in lymphatic tissue or tumor-draining lymph nodes for
the purpose of lymphatic mapping or identifying the existence,
location or staging of cancer in a body, or (b) provides for or
facilitates any test or procedure that is reasonably
substitutable for any test or procedure provided for or
facilitated by the Business Product. to the License-Back,
Cardinal will be provided with a right of first offer to market,
sell and/or market any new products developed from the
intellectual property rights licensed by Cardinal to the Company
by the License-Back.
As part of the Asset Sale, the Company and Cardinal will also
enter into ancillary agreements providing for transitional
services and other arrangements. The Company is required to amend
and restate its license agreement with The Regents of the
University of California (San Diego) (UCSD) to which UCSD grants
a license to the Company to exploit certain intellectual property
rights owned by UCSD and, separately, Cardinal will enter into a
license agreement with UCSD to which UCSD will grant a license to
Cardinal to exploit certain intellectual property rights owned by
UCSD for Cardinal to sell the Business Product in the Territory.
In addition, to the Purchase Agreement, the Company shall grant
to each of Cardinal and UCSD a five (5)-year warrant to purchase
up to 10 million shares and 1 million shares, respectively, of
the Companys common stock, par value $.001 per share, at an
exercise price of $1.50 per share, each of which warrant is
subject to anti-dilution and other customary terms and
conditions.
Consummation of the Asset Sale is subject to customary
conditions, including, among others, (i) approval by the Companys
stockholders of the Asset Sale, (ii) all filings with
governmental authorities, if any, shall have been made and any
necessary authorizations, consents, or approvals required from
such authorities shall have been obtained, (iii) if any
notification is required by the Hart-Scott Rodino Act, the
waiting period (and any extension thereof) under such act shall
have expired or will have been terminated, and (iv) the absence
of any valid order, statute, rule, regulation, executive order,
stay, decree, judgment or injunction prohibiting or preventing
consummation of the Asset Sale.
The Purchase Agreement also contains certain termination rights,
including, without limitation, the right of either party to
terminate the Purchase Agreement if the closing of the Asset Sale
has not occurred on or before the date that is 180 days after the
date of the Purchase Agreement, unless extended by mutual
agreement of the parties, or the Company does not receive
stockholder approval of the Asset Sale at its next special
meeting of stockholders. The Company will also be required to pay
a termination fee of $3 million to Cardinal and reimburse
Cardinal for its reasonable out-of-pocket expenses not to exceed
$2 million in the aggregate under certain circumstances,
including if the Purchase Agreement is terminated by (i) the
Company prior to stockholder approval and concurrently with such
termination the Company shall enter into another acquisition
agreement providing for implementation of transactions
contemplated by a superior proposal, or (ii) Cardinal if (a) the
Companys Board of Directors adversely changes its favorable
recommendation that its stockholders approve the Asset Sale, (b)
the Company fails to reconfirm its favorable recommendation of
the Asset Sale in certain circumstances within five business days
of Cardinals request, (c) the Company or its Board of Directors
makes certain public disclosures with respect to certain
acquisition proposals other than the Asset Sale, or (d) the
Company is in material breach of its exclusivity obligations
under the Purchase Agreement.
The foregoing description of the Purchase Agreement does not
purport to be complete, and is qualified in its entirety by
reference to the Purchase Agreement (and exhibits), a copy of
which is filed as Exhibit 10.1 to this Current Report on Form 8-K
and is incorporated herein by reference. A copy of the press
release announcing execution of the Purchase Agreement is
attached hereto as Exhibit 99.1.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit | |
| Number |
Exhibit Description |
| 10.1 |
Asset Purchase Agreement, dated November 23, 2016, between Navidea Biopharmaceuticals, Inc. and Cardinal Health 414, LLC. |
| 99.1 | Press Release dated November 23, 2016. |
About NAVIDEA BIOPHARMACEUTICALS, INC. (NYSEMKT:NAVB)
Navidea Biopharmaceuticals, Inc. is a biopharmaceutical company focused on the development and commercialization of precision immunodiagnostic agents and immunotherapeutics. The Company is developing multiple precision-targeted products based on the Manocept platform to help identify the sites and pathways of undetected disease. The Manocept platform is predicated on the ability to specifically target the CD206 mannose receptor expressed on activated macrophages. NAV5001 is an iodine-123 (I-123) radiolabeled single-photon emission computed tomography (SPECT) imaging agent being developed as an aid in the diagnosis of Parkinson’s disease (PD) and other movement disorders, with potential use as a diagnostic aid in dementia. NAV4694 is a fluorine-18 (F-18) radiolabeled positron emission tomography (PET) imaging agent being developed as an aid in the diagnosis of patients with signs or symptoms of Alzheimer’s disease (AD) and mild cognitive impairment (MCI). NAVIDEA BIOPHARMACEUTICALS, INC. (NYSEMKT:NAVB) Recent Trading Information
NAVIDEA BIOPHARMACEUTICALS, INC. (NYSEMKT:NAVB) closed its last trading session down -0.075 at 0.790 with shares trading hands.