Bankrupt Biopure Corp. is selling the bulk of its assets for $2.6 million to OPK Biotech LLC, according to court documents filed last night.
As part of the proposed deal, OPK will provide a $500,000 infusion of interim financing to keep the blood substitute maker afloat through early September. OPK, registered with the Delaware Department of Corporations on July 7, also agreed to assume certain liabilities.
Biopure announced shortly after the markets closed Thursday that it was seeking bankruptcy protection, capping several months of efforts to shore up its hemorrhaging finances. As part of the Chapter 11 petition, Biopure said it was selling “substantially all of its assets,” including all accounts receivable, to OPK Biotech.
According to the purchase agreement, OPK Biotech will secure all of Biopure’s intellectual property, including the patents for its flagship product, Hemopure, a blood-like fluid capable of carrying oxygen through the body. Biopure also produces Oxyglobin, an artificial blood used in veterinary practices.
In all, Biopure said it had $5.076 million in assets and $2.729 million in liabilities. Most of those are relatively small debts owed to various vendors, although it owes $1.2 million to the U.S. Navy Medical Research Center of Technology Transfer in Silver Springs, Md. Other big-buck creditors include Foley Hoag, a Boston law firm, and hospital research centers in Greece and South Africa.
Biopure president Zafiris Zafirelis and Jane Kober, senior vice president and general counsel, are due $375,000 and $640,000, respectively, in pay and severance under terms of their individual employment agreements.
In recent years, Biopure was hit with several setbacks as well as some chicanery by former executives. But according to the bankruptcy filing, the company blames most of its current misfortunes on the Journal of the American Medical Assn., which published a study on Hemopure and other artificial oxygen transports that Biopure officials claim contained numerous inaccuracies.
As result of the JAMA article, Biopure said regulators in South Africa revoked its marketing approvals, ending sales, and effectively kept the U.S. Navy from following through on its plans to use Hemopure to treat combat injuries.
According to the bankruptcy documents, Biopure is seeking a court-sponsored auction within about a month, with a $2.6 million “stalking horse” bid by OPK Biotech setting the floor price for its assets.