Item 1.01 Entry into a Material Definitive Agreement.
Agreement to Sell Chelsea Assets to Catalent
On January 12, 2021, Acorda Therapeutics, Inc. (the "Company") and Catalent
Pharma Solutions, Inc. ("Catalent") entered into an asset purchase agreement
(the "Asset Purchase Agreement"), pursuant to which the Company has agreed to
sell to Catalent certain assets related to the Company's manufacturing
activities located at the facilities situated in Chelsea, Massachusetts (the
"Chelsea Facility") and Waltham, Massachusetts (the "Waltham Facility"), for a
purchase price of $80 million, subject to certain adjustments, and the
assumption by Catalent of certain liabilities relating to such manufacturing
activities (the "Transaction"). The Company expects its net proceeds from the
Transaction to be approximately $70 million, following the payment of its
estimated fees and expenses, including the estimated costs of obtaining
third-party consents and approvals. The Company intends to use the net proceeds
received from the Transaction for general corporate purposes, which may include
funding capital expenditures and the repayment of indebtedness.
Pursuant to the Asset Purchase Agreement, Catalent will assume the Company's
existing lease to the Chelsea Facility, acquire the manufacturing equipment and
related manufacturing operations located at the Chelsea Facility and acquire
certain assets located at the Waltham Facility, which will be transferred to the
Chelsea Facility prior to the closing of the Transaction. Pursuant to the Asset
Purchase Agreement, Catalent will also extend offers of employment to certain
Company employees currently located at the Chelsea Facility and Waltham
Facility. The closing of the Transaction is subject to customary closing
conditions, including, among others, the receipt of certain third party consents
and approvals. The Transaction is expected to close in the first quarter of
2021.
The Asset Purchase Agreement contains customary representations, warranties and
covenants related to the transferred assets and the Transaction. Between the
date of the Asset Purchase Agreement and the closing of the Transaction, the
Company has agreed to use commercially reasonable efforts to operate the Chelsea
Facility in the ordinary course of business consistent with past practices,
taking into account changes in such operations as the Company believes necessary
to comply with any applicable laws issued in response to the COVID-19 pandemic,
and has agreed to certain other operating covenants with respect to the
transferred assets as more fully set forth in the Asset Purchase Agreement.
The Asset Purchase Agreement includes customary termination provisions in favor
of the Company, on the one hand, and Catalent, on the other hand, including if
the closing of the Transaction has not occurred on or before May 12, 2021.
Both the Company and Catalent have agreed to indemnify the other party for
losses arising from certain breaches of the Asset Purchase Agreement and other
specified liabilities, subject to certain limitations.
In connection with the closing of the Transaction, the Company and Catalent will
enter into certain additional ancillary agreements, including the manufacturing
services agreement described below, a transitional services agreement and
certain other customary agreements.
The foregoing description of the Asset Purchase Agreement does not purport to be
complete and is qualified in its entirety by reference to such document, which
will be filed as an exhibit to a future periodic or current report of the
Company.
Manufacturing Services Agreement with Catalent
The manufacturing services agreement (the "Manufacturing Agreement") provides
that Catalent will agree to manufacture the Company's product, Inbrija (levodopa
inhalation powder) (the "Product"), to the Company's specifications, and the
Company will agree to purchase the Product exclusively from Catalent during the
term of the Manufacturing Agreement; provided that such exclusivity requirement
will not apply to Product intended for sale in China.
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The Manufacturing Agreement, unless earlier terminated, will continue until
December 31, 2030, and will be automatically extended for successive two-year
periods unless either the Company or Catalent provides the other party with at
least 18-months' prior written notice of non-renewal. Either party may terminate
the Manufacturing Agreement by written notice under certain circumstances,
including material breach by the other party (subject to specified cure periods)
or the insolvency of the other party. The Company may also terminate the
Manufacturing Agreement upon certain specified regulatory events and for
. . .
Item 2.02 Results of Operations and Financial Condition.
On January 13, 2021, the Company issued a press release announcing its entry
into the Asset Purchase Agreement, the corporate restructuring described in Item
2.05 below and certain preliminary financial information regarding the Company's
fourth quarter and full-year 2020 financial performance, its financial condition
as of December 31, 2020 and financial guidance for 2021. A copy of the press
release is attached as Exhibit 99.1 to this Current Report on Form 8-K and the
information under the headings "Expected Fourth Quarter and 2020 Financial
Performance," "2021 Expense Guidance," "Non-GAAP Financial Measures" and
"Preliminary Financial Information" are incorporated by reference herein.
The Company reports its financial results in accordance with U.S. generally
accepted accounting principles. All financial information in the press release
as of and for the year ended December 31, 2020 is preliminary, as financial
close procedures for the year ended December 31, 2020 are not yet complete.
These estimates are not a comprehensive statement of the financial condition and
results of operations of the Company as of and for the year ended December 31,
2020. Actual results may differ materially from these estimates as a result of
the completion of normal year-end accounting procedures and adjustments,
including the performance of the Company's internal control over financial
reporting, the completion of the preparation and management's review of the
Company's financial statements as of and for the year ended December 31, 2020
and the subsequent occurrence or identification of events prior to the filing of
the financial statements to be included in the Company's Annual Report on Form
10-K for the year ended December 31, 2020.
Item 2.05 Costs Associated with Exit or Disposal Activities.
On January 12, 2021, the Company announced a corporate restructuring (the
"Restructuring") to reduce costs and focus its resources on Inbrija. As part of
the Restructuring, the Company is reducing headcount by approximately 16%
through a reduction in force (excluding the employees that are expected to
transfer to Catalent at the closing of the Transaction). All of the reduction in
personnel will take place in the first quarter of 2021. As a result, the Company
expects to realize estimated annualized cost savings related to headcount
reduction of approximately $6 million beginning in the second quarter of 2021.
The Company estimates that it will incur approximately $3.2 million of pre-tax
charges, substantially all of which will be cash expenditures, for severance and
other employee separation-related costs in the first quarter of 2021.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
Effective January 12, 2021, the Company's Board of Directors amended and
restated the Company's Amended and Restated Bylaws, dated December 15, 2011 (as
amended and restated, the "Bylaws"). The Bylaws were amended to adopt new
Section 5.5, which contains an exclusive forum clause providing that (A) the
Court of Chancery of the State of Delaware will be the exclusive forum for
actions or proceedings for (i) any derivative action or proceeding brought on
the Company's behalf; (ii) any action asserting a breach of a fiduciary duty;
(iii) any action asserting a claim arising pursuant to any provision of the
General Corporation Law of the State of Delaware or the Company's Certificate of
Incorporation or Bylaws; (iv) any action or proceeding to interpret, apply,
enforce or determine the validity of the Company's Certificate of Incorporation
or Bylaws, including any right, obligation or remedy thereunder; or (v) any
action asserting a claim governed by the internal affairs doctrine, and (B) the
federal district courts of the United States of America will be the exclusive
forum for resolving any complaint asserting a cause of action arising under the
Securities Act of 1933. The Bylaws also contain additional changes to clarify
the voting standard applicable to adjournments of meetings of stockholders and
to facilitate holding virtual meetings of stockholders.
The foregoing description of the amendments to the Bylaws does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Bylaws, which are filed as Exhibit 3.1 to this Current Report on Form 8-K and
are incorporated herein by reference.
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Item 8.01 Other Events.
On January 13, 2021, the Company issued a press release announcing its entry
into the Asset Purchase Agreement, the Restructuring and certain preliminary
financial information regarding the Company's fourth quarter and full-year 2020
financial performance, its financial condition as of December 31, 2020 and
financial guidance for 2021. A copy of the press release is attached as Exhibit
99.1 to this Current Report on Form 8-K and is incorporated herein by reference
herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
1.1 At The Market Offering Agreement, dated January 13, 2021, between
Acorda Therapeutics, Inc. and H.C. Wainwright & Co., LLC.
3.1 Amended and Restated Bylaws of Acorda Therapeutics, Inc., dated
January 12, 2021.
5.1 Opinion of Covington & Burling LLP.
23.1 Consent of Covington & Burling LLP (included in Exhibit 5.1).
99.1 Press release dated January 13, 2021.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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