RARE Daily

Catalyst Prepares to Liquidate, Will Distribute Cash to Stockholders

June 29, 2022

After significant downsizing, selling certain assets, and dealing with an activist shareholder lawsuit, Catalyst Biosciences said it is preparing to liquidate and distribute cash to the company’s stockholders through one or more distributions.

Photo: Nassim Usman, CEO of Catalyst Biosciences

Catalyst’s Board of Directors intends to maximize the size of the total distribution after satisfying or reserving for obligations, and to complete the distribution as soon as practicable. The Board currently expects the total amount of cash to be distributed to stockholders to be as much as $65 million, depending upon several factors, including pending stockholder litigation.

“After careful deliberation by the Board and constructive engagement with several of the company’s largest investors, I am pleased to announce that we are planning to distribute cash to stockholders,” said Nassim Usman, CEO of Catalyst Biosciences. “This follows our recently completed sale of a portion of our product portfolio for up to $60 million in cash, $55 million upfront and $5 million in a 12-month hold-back, after a thorough and competitive process with the assistance of independent financial and legal advisors.”

Catalyst intends to make an initial distribution as soon as the potential liability and expenses associated with the ongoing Delaware Court of Chancery stockholder litigation and the contested Annual Meeting of Stockholders initiated by one of the company’s stockholders, JDS1, LLC, can be fully evaluated by the board.

“We call upon JDS1 to drop its lawsuit and proxy contest so that we can distribute the first, sizable portion of our cash to the company’s stockholders expeditiously,” said Usman.

The company had reduced its workforce to just six employees, stopped all R&D activities, and is focused on managing the orderly transfer of the technology it recently sold to Vertex, and monetizing its remaining assets.

Catalyst focused on protease therapeutics to address unmet medical needs in disorders of the complement and coagulation systems. After the sale of its complement pipeline to Vertex Pharmaceuticals, Catalyst’s remaining product candidates consist of several coagulation related assets for the treatment of episodic bleeding and prophylaxis in subjects with rare bleeding disorders, which have shown sustained efficacy and safety in mid-stage clinical trials and are available for partnering.

The company expects that after the initial distribution, it will continue to hold sufficient cash for future expenses to satisfy its obligations and liabilities, meet indemnification and tax obligations associated with the recent asset sale to Vertex Pharmaceuticals, pay wind-down costs, and meet D&O insurance policy requirements.

Author: Rare Daily Staff

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