SEC Form 10-Q Files Tonight: “Reasonably Likely”… Investors Will Suffer “Complete Loss Of Common Stock Investments”

As I said at the head of the week, Humanigen is now openly preparing for a second trip into the bankruptcy courts. And that is a wise course — to prepare.

It gives the company perhaps its only leverage — in negotiations with its lenders, as the lenders would likely also be largely wiped out in any return to the tank. But it is a certainty that all the still outstanding common stock (and all issuable under options, warrants or other future contractual rights) would be worth a tenth of a cent — or less — in that scenario.

Here is the official disclosure filed tonight (at page 34) — and the company did so (IMHO) to allow a weekend for the market participants to thoughtfully-absorb its import:

If we are unable to reach a satisfactory agreement with our Term Loan Lenders our board of directors has authorized us to begin preparing the company to file a second bankruptcy petition. Given our lack of liquidity, it is reasonably likely that any such filing would result in a complete loss of value for our unsecured creditors and holders of our common stock….

Now you know. Onward — and anyone (Cough. Aldt440?!) who thinks this likely hideous end isn’t ultimately all Marty’s fault… is delusional.

Simply delusional. Citations to civil securities and civil bankruptcy litigation records available upon request — to prove it all.

I won’t offer any opinion on the new strategy announced in the Form 10-Q, other than to say… there is one small consolation — if the company survives, it may well go after Savant and others (in litigation) for their various alleged breaches and infringements of the KaloBios (now Humanigen) IP related to the benz program.

Be excellent to one another. I’m out for a bit.

Namaste…

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3 thoughts on “SEC Form 10-Q Files Tonight: “Reasonably Likely”… Investors Will Suffer “Complete Loss Of Common Stock Investments”

  1. aldt440 says:

    Why stop with Humanigen? With your logic, you could blame him for this too and put him away for life:

    https://www.cnbc.com/2015/09/21/biotech-falls-on-clinton-price-gouging-comments.html

    You have provided absolutely no evidence for your claim that Shkreli is ultimately responsible for an event a year after he was fully divested and almost 2 years after he was stripped of managerial and voting rights!!!!!!!!

    https://imgflip.com/i/1zlcod

    From the 10-Q you linked to:

    The Company was incorporated on March 15, 2000 in California and reincorporated as a Delaware corporation in September 2001 under the name KaloBios Pharmaceuticals, Inc. The Company completed its initial public offering in January 2013. Effective August 7, 2017, the Company changed its legal name to Humanigen, Inc.

    The Company has undergone a significant transformation since December 2015. As a result of challenges facing it at the time, on December 29, 2015, the Company filed a voluntary petition for bankruptcy protection under Chapter 11 of Title 11 of the U.S. Bankruptcy Code. On June 30, 2016, the Company’s Second Amended Plan of Reorganization, dated May 9, 2016, as amended (the “Plan”), became effective and the Company emerged from its Chapter 11 bankruptcy proceedings. Refer to Note 2 for additional details regarding the Company’s bankruptcy proceedings.

    From the time of its emergence from bankruptcy to August 29, 2017, the Company’s focus was on its lead product candidate benznidazole for the treatment of Chagas disease, a parasitic illness that can lead to long-term heart, intestinal and neurological problems. As more fully described in Note 10, the Company acquired certain worldwide rights to benznidazole on June 30, 2016 and, until August 29, 2017, was primarily focused on the development necessary to seek and obtain approval by the United States Food and Drug Administration (“FDA”) for benznidazole and the subsequent commercialization, if approved. According to FDA issued guidance, benznidazole is eligible for review pursuant to a 505(b)(2) regulatory pathway as a potential treatment for Chagas disease and, if it became the first FDA-approved treatment for Chagas disease, the Company would have been eligible to receive a Priority Review Voucher (“PRV”).

    However, on August 29, 2017, the FDA announced it had granted accelerated and conditional approval of a benznidazole therapy manufactured by Chemo Research, S.L. (“Chemo”) for the treatment of Chagas disease and had awarded that manufacturer a neglected tropical disease PRV. Chemo’s benznidazole also has received Orphan Drug designation. As a result of FDA’s actions and with the information currently available, the Company no longer expects to be eligible to receive a PRV with its own benznidazole candidate for the treatment of Chagas disease. Accordingly, the Company has ceased development of benznidazole and is currently assessing a full range of options with respect to its benznidazole assets and development program.

    Liked by 1 person

    • condor says:

      Okay — fair enough.

      Good luck to you… in your travels, you’ll need it.

      For my part, I’ll no longer provide you with a free education. You don’t pay for it; and you seem to think people here somehow owe you… something.

      We don’t.

      As I say — you are free to scroll on by.

      Or you can go read the hundreds of KaloBios posts on the other site. Your proof is right there.

      I’ll just no longer spoon feed you — man or woman (though I strongly suspect you are a man) — so much faux entitlement.

      Travel light brother.

      Liked by 1 person

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