Clovis Oncology (NASDAQ:CLVS) stock is on the move Monday as investors react to the pharmaceutical company filing for bankruptcy protection.
The first thing that investors need to know about is Clovis Oncology’s plan for this bankruptcy. The company doesn’t intend to restructure its business and come out of bankruptcy. Instead, it seeks to hold a court-approved sale of its assets.
Investors will also note that Clovis Oncology has secured financing that will allow it to continue normal operations during the bankruptcy. This has it claiming a $75 million Debtor-in-Possession (DIP) financing facility to get it through the bankruptcy process.
What Assets Are Up For Grabs?
Clovis Oncology notes that it’s already entered into a stalking horse agreement with Novartis (NYSE:NVS). This has Novartis planning to acquire all rights connected to FAP-2286. It will make an upfront payment of $50 million, with potential for further milestone payments of $333.75 million.
Outside of that, Clovis is also in talks with several other parties interested in its assets. The company didn’t provide names or reveal what assets these companies might be interested in acquiring, however.
CLVS stock is seeing heavy trading on today’s bankruptcy news as investors sell shares. As of this writing, some 12 million shares have changed hands. That’s quite the increase over its daily average trading volume of about 3.7 million shares.
CLVS stock is down 7.6% as of Monday morning.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
