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Update to “The Bidding Process, Procedures for the Sale of Velicept Therapeutics, Inc.”

Further to Gerbsman Partners sales letter of December 15, 2020 and “Updates” regarding the sale of Velicept Therapeutics, Inc. (“Velicept” or “Company”)  I am attaching “Exhibit A, Velicept NDA”, “Velicept Patent information”, “Velicept detail ppt information”, “Velicept Date Room Index” for Velicept Data Room due diligence information” and Asset Purchase Agreement (“APA”).

Gerbsman Partners  has been retained by Velicept (“assignment for the benefit of creditors, LLC”) (“Assignee” or “Seller”) the Assignee to Velicept to solicit interest for the acquisition of all or substantially all of the Velicept assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Velicept Assets”).

On December 9, 2020, Velicept Therapeutics, Inc., a Delaware corporation, as Assignor, made a General Assignment for the Benefit of Creditors (the “Assignment”) to Velicept (“assignment for the benefit of creditors, LLC”), a Delaware limited liability company, as Assignee, pursuant to Delaware state law. Please note that with the exception of the relationship created by the Assignment, and despite their similarity in name, Assignor and Assignee have no corporate affiliation to each other. Pursuant to the Assignment, Assignor transferred ownership of all of its rights in tangible and intangible assets (collectively, the “Assets”) to Assignee for sale. Assignee shall sell the Assets and distribute the net proceeds to creditors of Assignor.

I would encourage and recommend that all interested parties have their counsel speak with Tim Cox, to discuss any questions or comments of a legal nature relating to the transaction and “APA”.  Tim is available at 510 301 7813, tcox@sherwoodpartners.com . It is also recommended that the “APA” be submitted with any bid.  Bids are due on or before Friday January 22, 2021, at 5:00 pm Pacific Time

Disclaimer

This Enterprise Offering contains information regarding certain operations and the business of Velicept Therapeutics, Inc., and the information contained herein has been assembled for the purpose of providing interested parties with general information to assist in their evaluation of a possible acquisition of the Company or assets of the Company. Nothing contained in this Enterprise Offering is, or shall be relied upon as, a promise or representation as to the past, present or future performance of the Company or its product or as providing any assurances of any kind regarding the Company’s intellectual property or other assets.  In furnishing this Enterprise Offering, neither the Company, Gerbsman Partners nor Assignee undertakes any obligation to (and each expressly reserves the right not to) provide the recipient with access to any additional information of any kind with respect to the Company or any of its assets or operations.

Assignee has retained the services of certain former employees to assist with the sale of the assets. They have made themselves available to assist with due diligence and the transition of assets.

As Seller, Velicept (“assignment for the benefit of creditors, LLC”) will oversee the process, select the winning bidder(s) and provide some assistance with the transfer of assets to the buyer(s). This will be a closed bidding process whereby the names of the bidders and tthe bids will not be disclosed to the other interested parties. The sale is being conducted with the cooperation of the Assignee and certain former Velicept employees who have advised the Assignee that they will be available to assist buyers with due diligence and assist with a prompt transfer of the Velicept Assets.

Please review the “Important Legal Notice” below in that potential purchasers should not rely on any information contained provided by Assignee or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact.  Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Ken, Jim and I will be following up to review the updated Bidding Process, schedule due diligence meetings and answer any questions regarding the “Date Certain M&A Process”.

Any and all the assets of Velicept will be sold on an “as is, where is” basis and will be subject to “The Bidding Process for Interested Buyers”, outlined below.

 

IMPORTANT LEGAL NOTICE

The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to the Velicapt Assets has been supplied by third parties and obtained from a variety of sources. It has not been independently investigated or verified by Assignee or Gerbsman Partners or their respective agents.  

Potential purchasers should not rely on any information contained in this memorandum or provided by Assignee or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Assignee and Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reason of Assignee’s or Gerbsman Partners’ negligence or otherwise. 

Any sale of the Velicept Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of Assignee or Gerbsman Partners. Without limiting the generality of the foregoing, Assignee and Gerbsman Partners and their respective staff, agents, and attorneys,  hereby expressly disclaim any and all implied warranties concerning the condition of the Assignee Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Assignee’s or Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a nondisclosure agreement (in the form attached hereto as Exhibit A) to have access to key members of Velicept’s former management, intellectual capital and the due diligence “war room” documentation (the “Due Diligence Access”). Each interested party, upon obtaining Due Diligence Access, shall be deemed to acknowledge and represent that (i) it is bound by the bidding procedures described herein; (ii) it has an opportunity to inspect and examine the Velicept Assets and to review all pertinent documents and information with respect thereto; (iii) it is not relying upon any written or oral statements, representations, or warranties of Assignee or Gerbsman Partners, or any of their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of such interested party, and neither Assignee nor Gerbsman Partners (nor any of their respective, staff, agents, or attorneys) make any representations as to the accuracy or completeness of the same.

TERMS AND CONDITIONS TO SALE

On December 9, 2020, Velicept Therapeutics, Inc., a Delaware corporation, as Assignor, made a General Assignment for the Benefit of Creditors (the “Assignment”) to Velicept (“assignment for the benefit of creditors, LLC”), a Delaware limited liability company, as Assignee, pursuant to Delaware state law. Please note that with the exception of the relationship created by the Assignment, and despite their similarity in name, Assignor and Assignee have no corporate affiliation to each other. Pursuant to the Assignment, Assignor transferred ownership of all of its rights in tangible and intangible assets (collectively, the “Assets”) to Assignee for sale. Assignee shall sell the Assets and distribute the net proceeds to creditors of Assignor.

Seller has retained the services of Gerbsman Partners and certain former employees to assist with the sale of the assets. They have made themselves available to assist with due diligence and the transition of assets.

As Seller, Velicept (“assignment for the benefit of creditors, LLC”) will oversee the process, select the winning bidder(s) and provide some assistance with the transfer of assets to the buyer(s). This will be a closed bidding process whereby the names of the bidders and the bids will not be disclosed to the other interested parties.

The contemplated transaction will be an asset sale using a standard Asset Purchase Agreement (“APA”). Please note that the general terms under which the assets will be sold, and key terms include:

Sell and convey assets on an “as-is, where-is” basis with all faults;

Sell and convey assets with limited representations or warranties; and

No indemnity for the purchaser of assets and the purchaser will indemnify the Seller the use of the assets after the closing date.

It is important to note that Assignee uses a portion of the proceeds received from the sale for the administration of the estate and distributes the balance to the creditors of the estate. As such Assignee is not able to provide the representations or warranties that a buyer would typically receive. Please bid accordingly and with the acknowledgement that the actual terms and conditions of the final APA are to be consistent and substantially in the form of Assignee’s standard agreement.

Due diligence will begin immediately.  Assignee will provide access to an online data room to interested parties provided that a valid confidentiality and non-disclosure agreement (NDA) is put in place. Each interested party, when executing the NDA, shall be deemed to acknowledge and represent that (i) it is bound by the bidding procedures contained in this Offering Memorandum; (ii) that it has an opportunity to perform due diligence on the assets of Velicept Therapeutics, Inc.; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Velicept Therapeutics, Inc. or Assignee or their respective staff, agents or attorneys; and (iv) all provided documents and reports have been provided solely for the convenience of interested parties and neither Assignor nor Assignee (or their respective staff, agents or attorneys) makes any representations as to the accuracy or completeness of same.  The information contained in this Offering Memorandum has been provided to Assignee by the former management of Assignor. Neither Assignee nor Assignor represent that any of the information contained in this Offering Memorandum is a statement of opinion or fact.  Interested parties are solely responsible for performing their own due diligence to determine the value and status of the assets being offered through independent investigation by themselves and their legal and/or financial advisors.

Dates and Deadlines – Letters of Intent (containing the required information set forth in the paragraph below) should be received by no later than Friday, January 22 , 2021, at 5:00 pm Pacific Time.  Based on the submitted Letters of Intent or otherwise, qualifying parties (which meet the requirements established by the Assignee in its sole and absolute discretion) will be asked to prepare and submit Letters of Intent in the form of a standard Asset Purchase Agreement (an “APA”) (containing the required information set forth in the paragraph below).  Such Letters of Intent should be received no later than Friday January 22, 2021, at 5:00 pm Pacific Time (the “Offer Deadline”), or they may not be considered by the Assignee in its sole and absolute discretion.  The Assignee anticipates rendering a decision shortly after the Offer Deadline and communicating such decision to the parties submitting Letters of Intent.

Notwithstanding the deadlines set forth above, Indications of Interest and/or Letters of Intent may be presented to the Assignees at any time during the due diligence period by email or facsimile (contact information provided below).  Letters of Intent must include the name of the purchasing entity, the purchase price, the assets to be purchased, any contingencies to closing, and any variation from the standard terms and conditions of the APA (such variations shall be noted by submitting a “redline” version against the form APA provided by the Assignee).  A form APA will be provided upon request.  Interested Parties should be aware that any significant material changes to the form APA may jeopardize the transaction and cause the Assignee to reject any such Letters of Intent and reopen the bidding process.  The sale will be an “AS IS”, “WHERE IS” sale, with no representations or warranties whatsoever provided by the Assignee or Velicept Therapeutics, Inc. as to merchantability, fitness or use, and the assets shall be subject to any and all encumbrances and related obligations.

Assignee and former senior employees will also be available to host in-person and web presentations by teleconference with former technical resources that have been retained for this purpose.

Once the announcement has been made that the bidding has ended, the successful bidder (“Buyer”) will be required to close and fund promptly. Exclusivity will not be granted and it is the successful bidders’ sole responsibility to set the closing agenda.

Seller reserves the right to accelerate, delay, cancel or alter the bidding process immediately with or without notifying other bidders, and to withdraw any or all assets from this sale process in its sole discretion. Seller reserves the right to modify, cancel, delay, accelerate or revise the sale at any time with or without notifying interested parties.  Therefore, Interested parties are encouraged to complete due diligence and submit offers as soon as practicable.

All Bids/Letters of Intent should be submitted to steve@gerbsmanpartners.com and tcox@sherwoodpartners.com .

We appreciate your sincere interest in this opportunity and this exciting offering for the assets of the Velicept Therapeutics, Inc.  We look forward to engaging with you and your due diligence teams.

 

SPECIAL PURPOSE ENTITY DISCLOSURE

Velicept (“assignment for the benefit of creditors, LLC”) (“Assignee” or “Seller”), in its sole and limited capacity as Assignee for the Benefit of Creditors of Velicept Therapeutics, Inc. as Assignee is a special purpose entity under the direction of Assignee  headquartered at 3945 Freedom Circle, Suite 560, Santa Clara, California 95054, United States.

For additional information, please see below and/or contact:

Steven R. Gerbsman

Gerbsman Partners

steve@gerbsmanpartners.com

 

Kenneth Hardesty

Gerbsman Partners

ken@gerbsmanpartners.com

Read Full Post »

Update to “The Bidding Process, Procedures for the Sale of Velicept Therapeutics, Inc.”

Further to Gerbsman Partners sales letter of December 15, 2020 regarding the sale of Velicept Therapeutics, Inc. (“Velicept” or “Company”)  I am attaching “Exhibit A, Velicept NDA”, “Velicept Patent information”, “Velicept detail ppt information” and “Velicept Date Room Index” for Velicept Data Room due diligence information”.

Gerbsman Partners  has been retained by Velicept (“assignment for the benefit of creditors, LLC”) (“Assignee” or “Seller”) the Assignee to Velicept to solicit interest for the acquisition of all or substantially all of the Velicept assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Velicept Assets”).

On December 9, 2020, Velicept Therapeutics, Inc., a Delaware corporation, as Assignor, made a General Assignment for the Benefit of Creditors (the “Assignment”) to Velicept (“assignment for the benefit of creditors, LLC”), a Delaware limited liability company, as Assignee, pursuant to Delaware state law. Please note that with the exception of the relationship created by the Assignment, and despite their similarity in name, Assignor and Assignee have no corporate affiliation to each other. Pursuant to the Assignment, Assignor transferred ownership of all of its rights in tangible and intangible assets (collectively, the “Assets”) to Assignee for sale. Assignee shall sell the Assets and distribute the net proceeds to creditors of Assignor.

Disclaimer

This Enterprise Offering contains information regarding certain operations and the business of Velicept Therapeutics, Inc., and the information contained herein has been assembled for the purpose of providing interested parties with general information to assist in their evaluation of a possible acquisition of the Company or assets of the Company. Nothing contained in this Enterprise Offering is, or shall be relied upon as, a promise or representation as to the past, present or future performance of the Company or its product or as providing any assurances of any kind regarding the Company’s intellectual property or other assets.  In furnishing this Enterprise Offering, neither the Company, Gerbsman Partners nor Assignee undertakes any obligation to (and each expressly reserves the right not to) provide the recipient with access to any additional information of any kind with respect to the Company or any of its assets or operations.

Assignee has retained the services of certain former employees to assist with the sale of the assets. They have made themselves available to assist with due diligence and the transition of assets.

As Seller, Velicept (“assignment for the benefit of creditors, LLC”) will oversee the process, select the winning bidder(s) and provide some assistance with the transfer of assets to the buyer(s). This will be a closed bidding process whereby the names of the bidders and tthe bids will not be disclosed to the other interested parties. The sale is being conducted with the cooperation of the Assignee and certain former Velicept employees who have advised the Assignee that they will be available to assist buyers with due diligence and assist with a prompt transfer of the Velicept Assets.

Please review the “Important Legal Notice” below in that potential purchasers should not rely on any information contained provided by Assignee or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact.  Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Ken, Jim and I will be following up to review the updated Bidding Process, schedule due diligence meetings and answer any questions regarding the “Date Certain M&A Process”.

Any and all the assets of Velicept will be sold on an “as is, where is” basis and will be subject to “The Bidding Process for Interested Buyers”, outlined below.

 

IMPORTANT LEGAL NOTICE

The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to the Velicapt Assets has been supplied by third parties and obtained from a variety of sources. It has not been independently investigated or verified by Assignee or Gerbsman Partners or their respective agents.  

Potential purchasers should not rely on any information contained in this memorandum or provided by Assignee or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Assignee and Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reason of Assignee’s or Gerbsman Partners’ negligence or otherwise. 

Any sale of the Velicept Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of Assignee or Gerbsman Partners. Without limiting the generality of the foregoing, Assignee and Gerbsman Partners and their respective staff, agents, and attorneys,  hereby expressly disclaim any and all implied warranties concerning the condition of the Assignee Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Assignee’s or Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a nondisclosure agreement (in the form attached hereto as Exhibit A) to have access to key members of Velicept’s former management, intellectual capital and the due diligence “war room” documentation (the “Due Diligence Access”). Each interested party, upon obtaining Due Diligence Access, shall be deemed to acknowledge and represent that (i) it is bound by the bidding procedures described herein; (ii) it has an opportunity to inspect and examine the Velicept Assets and to review all pertinent documents and information with respect thereto; (iii) it is not relying upon any written or oral statements, representations, or warranties of Assignee or Gerbsman Partners, or any of their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of such interested party, and neither Assignee nor Gerbsman Partners (nor any of their respective, staff, agents, or attorneys) make any representations as to the accuracy or completeness of the same.  

TERMS AND CONDITIONS TO SALE

On December 9, 2020, Velicept Therapeutics, Inc., a Delaware corporation, as Assignor, made a General Assignment for the Benefit of Creditors (the “Assignment”) to Velicept (“assignment for the benefit of creditors, LLC”), a Delaware limited liability company, as Assignee, pursuant to Delaware state law. Please note that with the exception of the relationship created by the Assignment, and despite their similarity in name, Assignor and Assignee have no corporate affiliation to each other. Pursuant to the Assignment, Assignor transferred ownership of all of its rights in tangible and intangible assets (collectively, the “Assets”) to Assignee for sale. Assignee shall sell the Assets and distribute the net proceeds to creditors of Assignor.

Seller has retained the services of Gerbsman Partners and certain former employees to assist with the sale of the assets. They have made themselves available to assist with due diligence and the transition of assets.

As Seller, Velicept (“assignment for the benefit of creditors, LLC”) will oversee the process, select the winning bidder(s) and provide some assistance with the transfer of assets to the buyer(s). This will be a closed bidding process whereby the names of the bidders and the bids will not be disclosed to the other interested parties.

The contemplated transaction will be an asset sale using a standard Asset Purchase Agreement (“APA”). Please note that the general terms under which the assets will be sold, and key terms include:

Sell and convey assets on an “as-is, where-is” basis with all faults;

Sell and convey assets with limited representations or warranties; and

No indemnity for the purchaser of assets and the purchaser will indemnify the Seller the use of the assets after the closing date.

It is important to note that Assignee uses a portion of the proceeds received from the sale for the administration of the estate and distributes the balance to the creditors of the estate. As such Assignee is not able to provide the representations or warranties that a buyer would typically receive. Please bid accordingly and with the acknowledgement that the actual terms and conditions of the final APA are to be consistent and substantially in the form of Assignee’s standard agreement.

Due diligence will begin immediately.  Assignee will provide access to an online data room to interested parties provided that a valid confidentiality and non-disclosure agreement (NDA) is put in place. Each interested party, when executing the NDA, shall be deemed to acknowledge and represent that (i) it is bound by the bidding procedures contained in this Offering Memorandum; (ii) that it has an opportunity to perform due diligence on the assets of Velicept Therapeutics, Inc.; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Velicept Therapeutics, Inc. or Assignee or their respective staff, agents or attorneys; and (iv) all provided documents and reports have been provided solely for the convenience of interested parties and neither Assignor nor Assignee (or their respective staff, agents or attorneys) makes any representations as to the accuracy or completeness of same.  The information contained in this Offering Memorandum has been provided to Assignee by the former management of Assignor. Neither Assignee nor Assignor represent that any of the information contained in this Offering Memorandum is a statement of opinion or fact.  Interested parties are solely responsible for performing their own due diligence to determine the value and status of the assets being offered through independent investigation by themselves and their legal and/or financial advisors.

Dates and Deadlines – Letters of Intent (containing the required information set forth in the paragraph below) should be received by no later than Friday, January 22 , 2021, at 5:00 pm Pacific Time.  Based on the submitted Letters of Intent or otherwise, qualifying parties (which meet the requirements established by the Assignee in its sole and absolute discretion) will be asked to prepare and submit Letters of Intent in the form of a standard Asset Purchase Agreement (an “APA”) (containing the required information set forth in the paragraph below).  Such Letters of Intent should be received no later than Friday January 22, 2021, at 5:00 pm Pacific Time (the “Offer Deadline”), or they may not be considered by the Assignee in its sole and absolute discretion.  The Assignee anticipates rendering a decision shortly after the Offer Deadline and communicating such decision to the parties submitting Letters of Intent.

Notwithstanding the deadlines set forth above, Indications of Interest and/or Letters of Intent may be presented to the Assignees at any time during the due diligence period by email or facsimile (contact information provided below).  Letters of Intent must include the name of the purchasing entity, the purchase price, the assets to be purchased, any contingencies to closing, and any variation from the standard terms and conditions of the APA (such variations shall be noted by submitting a “redline” version against the form APA provided by the Assignee).  A form APA will be provided upon request.  Interested Parties should be aware that any significant material changes to the form APA may jeopardize the transaction and cause the Assignee to reject any such Letters of Intent and reopen the bidding process.  The sale will be an “AS IS”, “WHERE IS” sale, with no representations or warranties whatsoever provided by the Assignee or Velicept Therapeutics, Inc. as to merchantability, fitness or use, and the assets shall be subject to any and all encumbrances and related obligations.

Assignee and former senior employees will also be available to host in-person and web presentations by teleconference with former technical resources that have been retained for this purpose.

Once the announcement has been made that the bidding has ended, the successful bidder (“Buyer”) will be required to close and fund promptly. Exclusivity will not be granted and it is the successful bidders’ sole responsibility to set the closing agenda.

Seller reserves the right to accelerate, delay, cancel or alter the bidding process immediately with or without notifying other bidders, and to withdraw any or all assets from this sale process in its sole discretion. Seller reserves the right to modify, cancel, delay, accelerate or revise the sale at any time with or without notifying interested parties.  Therefore, Interested parties are encouraged to complete due diligence and submit offers as soon as practicable.

All Bids/Letters of Intent should be submitted to steve@gerbsmanpartners.com and tcox@sherwoodpartners.com .

We appreciate your sincere interest in this opportunity and this exciting offering for the assets of the Velicept Therapeutics, Inc.  We look forward to engaging with you and your due diligence teams.

SPECIAL PURPOSE ENTITY DISCLOSURE

Velicept (“assignment for the benefit of creditors, LLC”) (“Assignee” or “Seller”), in its sole and limited capacity as Assignee for the Benefit of Creditors of Velicept Therapeutics, Inc. as Assignee is a special purpose entity under the direction of Assignee  headquartered at 3945 Freedom Circle, Suite 560, Santa Clara, California 95054, United States.

For additional information, please see below and/or contact:

Steven R. Gerbsman                                                          

steve@gerbsmanpartners.com                         

 

Kenneth Hardesty

ken@gerbsmanpartners.com

Read Full Post »

Read Full Post »

Update to “The Bidding Process, Procedures for the Sale of Velicept Therapeutics, Inc.”

Further to Gerbsman Partners sales letter of December 15, 2020 regarding the sale of Velicept Therapeutics, Inc. (“Velicept” or “Company”)  I am attaching “Exhibit A, Velicept NDA”, “Velicept Patent information”, “Velicept detail ppt information” and “Velicept Date Room Index” for Velicept Data Room due diligence information”.

Gerbsman Partners  has been retained by Velicept (“assignment for the benefit of creditors, LLC”) (“Assignee” or “Seller”) the Assignee to Velicept to solicit interest for the acquisition of all or substantially all of the Velicept assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Velicept Assets”).

On December 9, 2020, Velicept Therapeutics, Inc., a Delaware corporation, as Assignor, made a General Assignment for the Benefit of Creditors (the “Assignment”) to Velicept (“assignment for the benefit of creditors, LLC”), a Delaware limited liability company, as Assignee, pursuant to Delaware state law. Please note that with the exception of the relationship created by the Assignment, and despite their similarity in name, Assignor and Assignee have no corporate affiliation to each other. Pursuant to the Assignment, Assignor transferred ownership of all of its rights in tangible and intangible assets (collectively, the “Assets”) to Assignee for sale. Assignee shall sell the Assets and distribute the net proceeds to creditors of Assignor.

Disclaimer

This Enterprise Offering contains information regarding certain operations and the business of Velicept Therapeutics, Inc., and the information contained herein has been assembled for the purpose of providing interested parties with general information to assist in their evaluation of a possible acquisition of the Company or assets of the Company. Nothing contained in this Enterprise Offering is, or shall be relied upon as, a promise or representation as to the past, present or future performance of the Company or its product or as providing any assurances of any kind regarding the Company’s intellectual property or other assets.  In furnishing this Enterprise Offering, neither the Company, Gerbsman Partners nor Assignee undertakes any obligation to (and each expressly reserves the right not to) provide the recipient with access to any additional information of any kind with respect to the Company or any of its assets or operations.

Assignee has retained the services of certain former employees to assist with the sale of the assets. They have made themselves available to assist with due diligence and the transition of assets.

As Seller, Velicept (“assignment for the benefit of creditors, LLC”) will oversee the process, select the winning bidder(s) and provide some assistance with the transfer of assets to the buyer(s). This will be a closed bidding process whereby the names of the bidders and tthe bids will not be disclosed to the other interested parties. The sale is being conducted with the cooperation of the Assignee and certain former Velicept employees who have advised the Assignee that they will be available to assist buyers with due diligence and assist with a prompt transfer of the Velicept Assets.

Please review the “Important Legal Notice” below in that potential purchasers should not rely on any information contained provided by Assignee or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact.  Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Ken, Jim and I will be following up to review the updated Bidding Process, schedule due diligence meetings and answer any questions regarding the “Date Certain M&A Process”.

Any and all the assets of Velicept will be sold on an “as is, where is” basis and will be subject to “The Bidding Process for Interested Buyers”, outlined below.

 

IMPORTANT LEGAL NOTICE

The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to the Velicapt Assets has been supplied by third parties and obtained from a variety of sources. It has not been independently investigated or verified by Assignee or Gerbsman Partners or their respective agents.  

Potential purchasers should not rely on any information contained in this memorandum or provided by Assignee or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Assignee and Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reason of Assignee’s or Gerbsman Partners’ negligence or otherwise. 

Any sale of the Sebacia Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of Assignee or Gerbsman Partners. Without limiting the generality of the foregoing, Assignee and Gerbsman Partners and their respective staff, agents, and attorneys,  hereby expressly disclaim any and all implied warranties concerning the condition of the Assignee Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Assignee’s or Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a nondisclosure agreement (in the form attached hereto as Exhibit A) to have access to key members of Velicept’s former management, intellectual capital and the due diligence “war room” documentation (the “Due Diligence Access”). Each interested party, upon obtaining Due Diligence Access, shall be deemed to acknowledge and represent that (i) it is bound by the bidding procedures described herein; (ii) it has an opportunity to inspect and examine the Velicept Assets and to review all pertinent documents and information with respect thereto; (iii) it is not relying upon any written or oral statements, representations, or warranties of Assignee or Gerbsman Partners, or any of their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of such interested party, and neither Assignee nor Gerbsman Partners (nor any of their respective, staff, agents, or attorneys) make any representations as to the accuracy or completeness of the same.  

TERMS AND CONDITIONS TO SALE

On December 9, 2020, Velicept Therapeutics, Inc., a Delaware corporation, as Assignor, made a General Assignment for the Benefit of Creditors (the “Assignment”) to Velicept (“assignment for the benefit of creditors, LLC”), a Delaware limited liability company, as Assignee, pursuant to Delaware state law. Please note that with the exception of the relationship created by the Assignment, and despite their similarity in name, Assignor and Assignee have no corporate affiliation to each other. Pursuant to the Assignment, Assignor transferred ownership of all of its rights in tangible and intangible assets (collectively, the “Assets”) to Assignee for sale. Assignee shall sell the Assets and distribute the net proceeds to creditors of Assignor.

Seller has retained the services of Gerbsman Partners and certain former employees to assist with the sale of the assets. They have made themselves available to assist with due diligence and the transition of assets.

As Seller, Velicept (“assignment for the benefit of creditors, LLC”) will oversee the process, select the winning bidder(s) and provide some assistance with the transfer of assets to the buyer(s). This will be a closed bidding process whereby the names of the bidders and the bids will not be disclosed to the other interested parties.

The contemplated transaction will be an asset sale using a standard Asset Purchase Agreement (“APA”). Please note that the general terms under which the assets will be sold, and key terms include:

Sell and convey assets on an “as-is, where-is” basis with all faults;

Sell and convey assets with limited representations or warranties; and

No indemnity for the purchaser of assets and the purchaser will indemnify the Seller the use of the assets after the closing date.

It is important to note that Assignee uses a portion of the proceeds received from the sale for the administration of the estate and distributes the balance to the creditors of the estate. As such Assignee is not able to provide the representations or warranties that a buyer would typically receive. Please bid accordingly and with the acknowledgement that the actual terms and conditions of the final APA are to be consistent and substantially in the form of Assignee’s standard agreement.

Due diligence will begin immediately.  Assignee will provide access to an online data room to interested parties provided that a valid confidentiality and non-disclosure agreement (NDA) is put in place. Each interested party, when executing the NDA, shall be deemed to acknowledge and represent that (i) it is bound by the bidding procedures contained in this Offering Memorandum; (ii) that it has an opportunity to perform due diligence on the assets of Velicept Therapeutics, Inc.; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Velicept Therapeutics, Inc. or Assignee or their respective staff, agents or attorneys; and (iv) all provided documents and reports have been provided solely for the convenience of interested parties and neither Assignor nor Assignee (or their respective staff, agents or attorneys) makes any representations as to the accuracy or completeness of same.  The information contained in this Offering Memorandum has been provided to Assignee by the former management of Assignor. Neither Assignee nor Assignor represent that any of the information contained in this Offering Memorandum is a statement of opinion or fact.  Interested parties are solely responsible for performing their own due diligence to determine the value and status of the assets being offered through independent investigation by themselves and their legal and/or financial advisors.

Dates and Deadlines – Letters of Intent (containing the required information set forth in the paragraph below) should be received by no later than Friday, January 22 , 2021, at 5:00 pm Pacific Time.  Based on the submitted Letters of Intent or otherwise, qualifying parties (which meet the requirements established by the Assignee in its sole and absolute discretion) will be asked to prepare and submit Letters of Intent in the form of a standard Asset Purchase Agreement (an “APA”) (containing the required information set forth in the paragraph below).  Such Letters of Intent should be received no later than Friday January 22, 2021, at 5:00 pm Pacific Time (the “Offer Deadline”), or they may not be considered by the Assignee in its sole and absolute discretion.  The Assignee anticipates rendering a decision shortly after the Offer Deadline and communicating such decision to the parties submitting Letters of Intent.

Notwithstanding the deadlines set forth above, Indications of Interest and/or Letters of Intent may be presented to the Assignees at any time during the due diligence period by email or facsimile (contact information provided below).  Letters of Intent must include the name of the purchasing entity, the purchase price, the assets to be purchased, any contingencies to closing, and any variation from the standard terms and conditions of the APA (such variations shall be noted by submitting a “redline” version against the form APA provided by the Assignee).  A form APA will be provided upon request.  Interested Parties should be aware that any significant material changes to the form APA may jeopardize the transaction and cause the Assignee to reject any such Letters of Intent and reopen the bidding process.  The sale will be an “AS IS”, “WHERE IS” sale, with no representations or warranties whatsoever provided by the Assignee or Velicept Therapeutics, Inc. as to merchantability, fitness or use, and the assets shall be subject to any and all encumbrances and related obligations.

Assignee and former senior employees will also be available to host in-person and web presentations by teleconference with former technical resources that have been retained for this purpose.

Once the announcement has been made that the bidding has ended, the successful bidder (“Buyer”) will be required to close and fund promptly. Exclusivity will not be granted and it is the successful bidders’ sole responsibility to set the closing agenda.

Seller reserves the right to accelerate, delay, cancel or alter the bidding process immediately with or without notifying other bidders, and to withdraw any or all assets from this sale process in its sole discretion. Seller reserves the right to modify, cancel, delay, accelerate or revise the sale at any time with or without notifying interested parties.  Therefore, Interested parties are encouraged to complete due diligence and submit offers as soon as practicable.

All Bids/Letters of Intent should be submitted to steve@gerbsmanpartners.com and tcox@sherwoodpartners.com .

We appreciate your sincere interest in this opportunity and this exciting offering for the assets of the Velicept Therapeutics, Inc.  We look forward to engaging with you and your due diligence teams.

SPECIAL PURPOSE ENTITY DISCLOSURE

Velicept (“assignment for the benefit of creditors, LLC”) (“Assignee” or “Seller”), in its sole and limited capacity as Assignee for the Benefit of Creditors of Velicept Therapeutics, Inc. as Assignee is a special purpose entity under the direction of Assignee  headquartered at 3945 Freedom Circle, Suite 560, Santa Clara, California 95054, United States.

For additional information, please see below and/or contact:

Steven R. Gerbsman                                                          

Gerbsman Partners

steve@gerbsmanpartners.com                         

 

Kenneth Hardesty

Gerbsman Partners

ken@gerbsmanpartners.com

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SALE OF Velicept Therapeutics, Inc.

Gerbsman Partners  has been retained by Velicept (“assignment for the benefit of creditors, LLC) (“Assignee or “Seller”) the Assigne to Velicept Therapeutics, Inc.. (“Velicept) to solicit interest for the acquisition of all or substantially all of the Velicept assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Velicept Assets”).  Please see attached Exhibit A, NDA, Velicept Patent Status and Velicept information power point.

On December 9, 2020, Velicept Therapeutics, Inc., a Delaware corporation, as Assignor, made a General Assignment for the Benefit of Creditors (the “Assignment”) to Velicept (assignment for the benefit of creditors), LLC, a Delaware limited liability company, as Assignee, pursuant to Delaware state law. Please note that with the exception of the relationship created by the Assignment, and despite their similarity in name, Assignor and Assignee have no corporate affiliation to each other. Pursuant to the Assignment, Assignor transferred ownership of all of its rights in tangible and intangible assets (collectively, the “Assets”) to Assignee for sale. Assignee shall sell the Assets and distribute the net proceeds to creditors of Assignor.

Disclaimer

This Enterprise Offering contains information regarding certain operations and the business of Velicept Therapeutics, Inc., and the information contained herein has been assembled for the purpose of providing interested parties with general information to assist in their evaluation of a possible acquisition of the Company or assets of the Company. Nothing contained in this Enterprise Offering is, or shall be relied upon as, a promise or representation as to the past, present or future performance of the Company or its product or as providing any assurances of any kind regarding the Company’s intellectual property or other assets.  In furnishing this Enterprise Offering, neither the Company, Gerbsman Partners nor Assignee undertakes any obligation to (and each expressly reserves the right not to) provide the recipient with access to any additional information of any kind with respect to the Company or any of its assets or operations.

Assignee has retained the services of certain former employees to assist with the sale of the assets. They have made themselves available to assist with due diligence and the transition of assets.

As Seller, Velicept (assignment for the benefit of creditors), LLC will oversee the process, select the winning bidder(s) and provide some assistance with the transfer of assets to the buyer(s). This will be a closed bidding process whereby the names of the bidders and tthe bids will not be disclosed to the other interested parties. The sale is being conducted with the cooperation of the Assignee and certain former Velicept employees whohave advised the Assignee that they will be available to assist buyers with due diligence and assist with a prompt transfer of the Velicept Assets.

Velicept Investment to Date:

Velicept was formed through a merger with Altherx Therapeutics, Inc. in July 2015.  Since that time, approximately $49.2 Million has been invested to date, including approximately $7.3 Million of convertible subordinated bridge notes. Investors include Samsara BioCapital, Becker Entities, Longitude Capital and Fountain Healthcare Partners.

Velicept has 22 patents and 11 patents pending.

IMPORTANT LEGAL NOTICE:  

The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to the Velicapt Assets has been supplied by third parties and obtained from a variety of sources. It has not been independently investigated or verified by Assignee or Gerbsman Partners or their respective agents.  

Potential purchasers should not rely on any information contained in this memorandum or provided by Assignee or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Assignee and Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reason of Assignee’s or Gerbsman Partners’ negligence or otherwise. 

Any sale of the Sebacia Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of Assignee or Gerbsman Partners. Without limiting the generality of the foregoing, Assignee and Gerbsman Partners and their respective staff, agents, and attorneys,  hereby expressly disclaim any and all implied warranties concerning the condition of the Assignee Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Assignee’s or Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.

Velicept History and Background

From a historical perspective, solabegron’s IND 71,412 was originally submitted by GlaxoSmithKline (GSK) on December 22, 2004 for the treatment of OAB. The IND was inactivated on January 7, 2010 based on the Sponsor’s shift in strategic focus from Urology to other therapy areas. Subsequent to this decision, on March 15, 2011, AltheRx Pharmaceuticals, Inc. acquired ownership of solabegron to continue its development for the treatment of OAB. Velicept Therapeutics acquired AltheRx Pharmaceuticals and reactivated the IND on October 3, 2016.  Two other INDs were submitted to investigate treatments for type 2 diabetes mellitus (T2DM) (IND 61,237) and irritable bowel syndrome (IBS) (IND 75,230) using solabegron.

Extensive non-clinical development has been conducted including 26‑week repeat dose toxicity, receptor activity assay, 104‑week carcinogenicity in two species, multiple drug interaction studies, multiple pharmacodynamic models towards each indication, as well as safety pharmacology studies including cardiac and cardiovascular models. Pharmacology studies have also included evaluation of the major metabolite of solabegron, GW678953, an acyl glucuronide. Assessment of the absorption, distribution, metabolism, and elimination (ADME) profile of solabegron has been evaluated broadly.

The Phase 1 and Phase 2 studies with solabegron included multiple formulations ranging from single doses of 2.5 mg to multiple doses of up to 400 mg twice daily for 13 days administered to healthy subjects as well as to patients with T2DM, IBS and OAB.

Since the IND was reactivated, five Phase 1 studies have been completed. Three of the studies (VEL-1001, 1002, and 1004) were exploratory formulation development studies, primarily focused on the development of one or more modified release formulations to support once daily dosing.  A Phase 1 study (VEL-1006) has been completed to examine the pharmacokinetics of both the immediate release and modified release drug product formulations used in the Phase 2 studies. Finally, a study to evaluate the routes of excretion of 14C-labeled solabegron in healthy volunteers has been completed; the metabolite profiling for solabegron, is ongoing (VEL-1005).

Two Phase 2 studies in adult female subjects with OAB (VEL-2002 and VEL-2001) have recently been completed.  The development goals for VEL-2002 were to confirm the previous efficacy, safety and tolerability results from an earlier Phase 2a study for solabegron immediate release formulation dosed at 125 mg twice daily and to extend the dose range up to 175 mg administered twice daily.  The development goals for VEL-2001 were to evaluate the efficacy, safety and tolerability of solabegron modified release drug product at 275 mg and 400  mg administered once daily.

One thousand five-hundred and eighty-one (1581) subjects have been exposed to solabegron, to date, including 511 subjects in Phase 1 studies and 1070 subjects in Phase 2 studies.  Solabegron continues to be generally well tolerated.  A comprehensive assessment for solabegron safety focused on heart rate and blood pressure has been updated with data from studies completed since 2013 (Solabegron White Paper, 2013).  The safety profile for solabegron continues to support prolonged dosing of large numbers of subjects in clinical trials.

Company Investment to Date:

The Company was formed through a merger with Altherx Therapeutics, Inc. in July 2015.  Since that time, approximately $49.2 Million has been invested to date, including approximately $7.3 Million of convertible subordinated bridge notes. A summary of the major shareholders’ investment to date is below:

Key Attributes:

Velicept Therapeutics, Inc. believes its assets are attractive for multiple reasons:

  1. High patient dissatisfaction with anticholinergics and mirabegron provide opportunities in a large market

Despite nearly 40 million OAB patients in the U.S., roughly 4 million are on OAB medications. Poor tolerability or insufficient efficacy lead to ~75% one-year discontinuation rates; 3 million patients continue to seek better treatment

Mirabegron, the first β-3 agonist with $1 billion in U.S. sales, offers better tolerability than the anti-cholinergics, but with reduced efficacy, CV effects and DDI issues

Vibegron (expected to launch in 2021) offers no efficacy differentiation and only early onset and fewer DDI’s than mirabegron (but not better than Solabegron)

High churn among patients desperate for relief opens the door for new entrants

     2. Multiple Phase 2 studies support the ideal TPP: Anti-cholinergic-like efficacy with best in class safety of β-3 agonists

Clinically meaningful improvement across all key metrics in Phase 2b (micturitions, dry-rate, urgency)

Solabegron’s rapid onset and efficacy in line with the anti-cholinergics, but with placebo-like side effects and strong safety profile

First and only re-sensitizing β-3 agonist with best-in-class profile in OAB

BID formulation enables β-3 receptor re-sensitization; key to optimizing efficacy for control of symptoms

    3. Low risk asset with long life: Extensive Large Pharma data package and fresh IP

Discovered and first developed by GSK (tested in OAB, IBS and Type 2 diabetes patients); de-risked full preclinical and tox package and ~1,500 patient safety database

Consistent efficacy and safety results across both Phase II studies using the lead formula

An established, well-worn Phase III path/design

IP to 2037, including on API, with potential for additional patents extending into 2040

    4.  Phase 3 ready-to-go: FDA feedback and partnerships underway

FDA end of Phase 2 meeting feedback received and incorporated in Phase 3 trial design

Modest expense and timeline; high probability of success; Company willing to share risk

Multiple partnerships will help cost-share expenses to get through approval

    5.  Solabegron provides a pipeline-within-a- product opportunity

Positive Phase 2 results in IBS

Potential for BPH as follow-on indication

Combo product (with related patents); proven ability to make a fixed-dose combo vs. mirabegron’s failed efforts

    6.  Focused commercial effort drives revenues and limits capital

Commercial approach similar to mirabegron: focus on specialists as patients seek better symptom control

Urologists along with UroNPPA/Gyn account for 40% of prescription volume

Limited salesforce of ~75 reps; $800mm US peak sales forecast

 

Impact of Beta-3 Mechanism of Action

Solabegron is a β3-adrenoceptor (β3-AR) agonist under clinical evaluation for the treatment of overactive bladder (OAB). Solabegron has demonstrated the ability to reduce spontaneous contractile activity and relax human bladder smooth muscle in vitro and significantly increase micturition threshold in a dog model of OAB. In women with severe symptoms of OAB, treatment with solabegron led to a significant decrease in incontinence episodes and micturition frequency (Ohlstein, 2012). These observations suggest that solabegron may be an effective therapy for OAB.

Solabegron is a potent and highly selective in vitro agonist of human β3-AR relative to β1- and β2-AR and is not an antagonist at either β1- or β2-ARs. A glucuronide metabolite of solabegron has been identified in nonclinical species and humans. In in vitro urinary bladder strip assays, solabegron demonstrated potent inhibition of KCl-induced contraction in strips isolated from ferrets and dogs and a relatively lower potency in strips isolated from rats. In rat-isolated bladder strips, the potency and efficacy of solabegron’s ability to inhibit electrical field stimulation (EFS)-induced contraction was increased synergistically when administered in combination with sub-threshold concentrations of antimuscarinic agents, such as tolterodine, solifenacin, or oxybutynin. In human bladder strips, solabegron also produced concentration-dependent relaxation and suppression of spontaneous activity at concentrations of 0.01 to 10 µM (Biers et al., 2006) In vivo studies have also provided evidence consistent with bladder relaxation. An intravenous dose of solabegron (3 mg/kg) to anesthetized female dogs with intravesical acetic acid-induced bladder irritation evoked an increase in micturition reflex threshold and decreased bladder pressure during filling.

Receptor desensitization, or reduction in agonist activity, due to exposure of the receptor to agonist stimulation is a common feature of many G‑protein‑coupled receptors including G-protein coupled adrenergic receptors, opioid receptors, dopamine, adenosine and GABA-B receptors as well as others (Pennock, 2012; Pennock, 2016; Wetherington, 2002). A number of mechanisms have been postulated to underlie receptor desensitization.  Common amongst these mechanisms is that agonist stimulation at the receptor is the event which precipitates an adaptive response to prolonged/aberrant receptor stimulation which manifests as desensitization.

Beta-3 agonists may reduce urinary frequency due to direct interaction with beta-3 receptors in detrusor muscle.  In contrast, beta-3 agonists reduce urinary incontinence by interacting with pre-junctional receptors resulting in inhibition of acetylcholine release.  There is an emerging body of literature that suggests that there may be differences in the regulation of beta-3 receptors at these distinct synaptic sites including desensitization.

It has been demonstrated the post-junctional beta-3 receptor located on the detrusor bladder smooth muscle will desensitize following prolonged exposure to a beta-3 adrenoceptor agonist (Velicept CCU001 [Rat] and Velicept CCU002 report, 2015; Velicept CCU001 [Human], 2016) (see Figure below).  This effect is across all receptor agonists tested and not specifically related to specific chemical compound.  When this receptor becomes desensitized, the functional relaxation response is diminished.

There are also pre-junctional beta-3 receptors in the urinary bladder that inhibit cholinergic neurotransmission in the urinary bladder (Rouget, 2014; D’Agostino, 2015; Silva, 2017) (see Figure below).  Activation of these receptors by endogenous catecholamines or exogenous beta-3 adrenoceptor agonists reduces the release of neuronal acetylcholine (ACh), decreasing post-junctional muscarinic receptor activation on the detrusor smooth muscle thereby reducing detrusor hyperactivity.  Detrusor hyperactivity is a major contributor to bladder incontinence. There are involuntary contractions of the detrusor muscle during the filling phase of the micturition cycle. Detrusor hyperactivity with impaired contractile function is the second most common (33%) cause of incontinence.  These pre-junctional receptors appear less prone to desensitization.

Beta-3 Receptors in the Bladder

Post-junctional beta- 3 adrenoceptor receptor agonists cause relaxation of the detrusor smooth muscle of the urinary bladder

Relaxation of the detrusor muscle increases bladder capacity

Increased capacity reduces micturitions, urgency episodes and incontinence episodes

Stimulation of pre-junctional beta-3 receptors produces inhibition of cholinergic neurotransmission

 

Beta-3 receptor Desensitization in OAB After High Doses of Solabegron

Following post-junctional Beta-3 receptor desensitization, beta-3-mediated relaxation is inhibited, leading to an increase in micturitions

Pre-junctional Beta-3 receptors are NOT desensitized and remain activated by Solabegron. This maintains a decrease in the neuronal release of ACh, thereby maintaining continence

Pre-junctional beta-3 receptors (like many other pre-junctional receptors) are resistant to receptor desensitization.  This may be related to being physically located outside of the synaptic cleft.

 

Industry Overview

OAB impacts 40M+ patients in the US.  Prevalence in US greater than ED and similar to migraine; Comparable market dynamics to migraine as new classes overtake old class of agents and specialists play larger role.  There is not just a QoL impact: potential for severe outcomes, significant financial burden for patient and HC system (night-time falls linked to waking to use bathroom at night).  There is a high patient churn with associated payor impact with patients ~84% more yearly visits to a physician.  The annual direct costs similar to breast cancer and osteoporosis >$12bn.

As outlined below, there are a number of OAB market and competitive dynamics that support the realization of a significant revenue generation and profitability opportunity for solabegron – even in a scenario where Phase 3 data reflects parity with vibegron on primary and secondary efficacy endpoints.  These dynamics include:

Rapid growth in the target demographic – the age 50+ population in the U.S. will continue to grow at an unprecedented rate through 2030, expanding the symptomatic, diagnosed and treated OAB population. Solabegron will be addressing the needs of a growing target population and market;

Growing awareness of the HEOR, QoL and economic impact of OAB syndrome – the risks of uncontrolled OAB are significant in terms of quality of life, activities of daily living, and health economics (falls, fractures and other negative outcomes). This awareness supports more aggressive screening and treatment of a larger share of the currently untreated/symptomatic OAB population, leading to a higher volume of patients receiving prescription OAB therapies;  Per year direct and indirect costs are well over $12B;

Declining market share of anticholinergic therapies as first-line OAB therapy – while currently garnering the largest share of the OAB market as a drug class, anticholinergic share is declining as market expansion and growth is increasingly driven by beta-3 receptor agonist therapies;

Favorable treatment guideline recommendations – AUA guidance on the treatment of OAB has migrated to include drug therapies (including beta-3 receptor agonists) as first line therapy, in conjunction with behavioral therapy-related intervention.  Furthermore, dementia concerns are causing experts to suggest bypassing anticholinergics as first line;

Consistently high patient churn for existing OAB therapies – driven by the side effect profile of the anticholinergic class, which produces high rates of constipation and dry mouth, and exacerbated by the relatively moderate levels of clinical efficacy among currently available β-3 therapies against the four parameters of OAB treatment, patients have been churning off existing OAB therapies several times during their treatment journey

Efficacy remains an unmet need for patients and providers – while anticholinergics provide relatively strong efficacy in reducing OAB symptoms, the tolerability profile of the class is poor. The positioning of mirabegron, and presumably vibegron, is largely focused upon preferential tolerability and (in the case of vibegron) minimizing DDI concerns. The primary attribute of importance to patients and prescribers – efficacy – will remain largely unaddressed in advance of the launch of solabegron;

Solabegron represents a unique product profile delivering balanced efficacy, safety and tolerability with dosing that enables tailored therapy – solabegron will be differentiated as the first and only therapy to address the issue of receptor desensitization.  Furthermore, BID dosing will allow for tailored therapy to align with the symptom control and lifestyle needs of OAB patients;

Minimal payor management of the OAB category and favorable pricing dynamics –  despite the availability of multi-source treatment options for years, branded therapies continue to enjoy high levels of access (95%+ both in both commercial and Medicare plans), with 5-9% annual price increases across branded therapies in the face of multiple generic options.

 

Product Offering

Solabegron is a β3-adrenoceptor (β3-AR) agonist under clinical evaluation for the treatment of overactive bladder (OAB). Solabegron has demonstrated the ability to reduce spontaneous contractile activity and relax human bladder smooth muscle in vitro and significantly increase micturition threshold in a dog model of OAB. In women with severe symptoms of OAB, treatment with solabegron led to a significant decrease in incontinence episodes and micturition frequency (Ohlstein, 2012).  It has also been studied in Irritable Bowel Syndrome (“IBS

 

Intellectual Property

Currently we have following patents issued or in review: please see appended spreadsheet.

 

Regulatory

Prior to Velicept acquiring Solabegron, GSK completed all long term pre-clinical and toxicity studies, including carcinogenicity studies.  Furthermore, Solabegron has been through an extensive clinical pharmacology program encompassing over 20 studies.  As noted elsewhere, approximately 1,500 patients have already been exposed to Solabegron.  GSK also completed POC Phase 2 studies in OAB, IBS and diabetes and Velicept has completed numerous Phase I studies and two Phase 2b studies in OAB, including a Phase 2b with the formulation to be used in the upcoming Phase 3 study.

In February 2020 Velicept had an end of Phase 2 meeting with the FDA.  In the meeting the Company proposed two Phase 3 studies that include male participants, but is otherwise little changed (other than number of patients) from the most recent Phase 2b study conducted by the Company, and with endpoints, inclusion and exclusion criteria consistent with prior Phase 3 studies in OAB.  Leading up to the Phase 3 study, the Company expects to initiate and complete a food effect and TQT study and to initiate a mild to moderate renal impairment study.  Minutes from the meeting along with other correspondence with the FDA are available in the data room.

 

Clinical Trials: Recent Phase 2b and Upcoming Phase 3

Phase 2b Studies:

The Company completed two randomized, double-blind, placebo-controlled, parallel group, multicenter studies in OAB patients.  The two studies used an identical study design and endpoints with one using a BID formulation (VEL-2002) and the other with Velicept’s initial QD formulation (VEL-2001).  The primary endpoint was a reduction in micturition frequency at week 12.  Secondary endpoints included reduction in urgency urinary incontinence (absolute and % reduction), dry-rate and increased void volume.  Patients were all adult females in both studies to allow for better comparisons against the GSK Phase 2 studies.

Following initial screening there was a two-week run-in period during which patients received placebo and were asked to keep an electronic diary.  Inclusion criteria included, among other things, an average of more than eight (8) micturitions per day and at least one (1) incontinence or “wet” episode per day, each measured over 3 consecutive days.  Patients were then randomized into one of two active groups or a placebo group.  In the VEL-2002 (BID) study, patients received either Solabegron IR 125mg or 175mg or placebo, twice daily.  There were 146 subject per treatment arm for VEL-2002 and 125 per treatment arm for VEL-2001.  Data was collected at week 4, week 8 and week 12, with a follow up visit one week after the week 12 visit.

A summary of the studies relative to the earlier GSK study as well as those of the two competitors (myrbetriq/mirabegron and vibegron) are provided below.  These show that not only did Solabegron achieve clinically meaningful improvement (defined by KOL’s as a 15% improvement relative to current β-3 agonist treatments, but in many cases improvements were double those of mirabegron and solabegron.  Additional data is available in the data room.

Phase 3 Studies:

The Company planned for two randomized, double-blind, placebo-controlled, parallel group, multicenter studies in OAB patients.  The two studies will use an identical study design and endpoints, except if one study is run in the EU there will be an active comparator.  The primary endpoints will be a reduction in micturition frequency and reduction in UUI frequency at week 12.  Secondary endpoints will likely mirror those used in the Company’s Phase 2 studies.  Patients will include a mix of adult males (~15%) and females in both studies.

As in the Phase 2 studies, following initial screening there was a two-week run-in period during which patients received placebo and were asked to keep an electronic diary.  Inclusion criteria include, among other things, an average of more than eight (8) micturitions per day (but less than 18 per day) and likely more than one (1) incontinence or “wet” episode per day, each measured over 3 consecutive days.  Patients are then randomized into either an active group (125mg) or placebo group, taken twice daily.  The target is 450 patients per treatment arm, powered at 90% to detect a difference of 0.9 micturitions/day with a standard deviation of 2.4.  Data will be collected at week 4, week 8 and week 12, with a follow up visit one week after the week 12 visit.  Patients will be given an option to enroll in a long-term extension safety study up to 52 weeks.

Based upon historical experiences in recent Phase 3 trials, the Company’s recent experiences, the anticipated lack of competing studies in OAB and feedback from a cross section of CRO’s, each Phase 3 study is expected to take 10-12 months to enroll and complete.

Manufacturing

The Company relies on third-party CMO’s for its drug substance and drug product needs.  Velicept is in the process of tech transfer for drug substance and drug product but suspended these activities during ongoing discussions with potential partners.

Research and Development

We are not developing any other asset and outsource to CRO’s all Phase 1, 2 and 3 work as well as any other work, including some of the combo product work which has yielded a fixed-dose product that mirabegron’s makers could not manufacture.

 

 

Management Team

Dr. James C. Walker
Chief Executive Officer

Jim has over 25 years in the pharmaceutical industry.  Jim founded and was CEO and Chairman of Octagon Research Solutions, Inc. (Octagon), a global pharmaceutical services and software company. Octagon was acquired by Accenture (NYSE: ACN) in September 2012.  Prior to founding Octagon, Jim worked as a Regulatory Affairs professional at both Johnson & Johnson and Schering-Ploug

Doug Gessl
Chief Financial Officer

Mr. Gessl has 15 years of experience in biotech and nearly 20 years in the financial services sector. Mr. Gessl is also a partner in NeXeption. Previously he served as Chief Financial Officer of Onspira Therapeutics (acquired by Altavant), Chief Operating Officer and Chief Financial Officer of Ceptaris Therapeutics (acquired by Actelion), Chief Financial Officer of Ralexar Therapeutics and Chief Financial Officer and Senior Vice President of Ception Therapeutics (acquired by Cephalon 

Dr. Clarence Young, MD
Chief Medical Officer

Dr. Young has nearly 25 years pharmaceutical industry experience, building and leading high performing product development teams and organizations.  Prior to joining Velicept, Dr. Young was Senior Vice-President and Chief Medical Officer at Iroko Pharmaceuticals, LLC, where he provided clinical and medical leadership for three NDA filings and approvals and built a medical affairs organization to support multiple product launches.  Other prior industry leadership positions include: Vice President, Integrated Hospital Care and Vice-President, Targeted Therapies, at Novartis Pharmaceutical Corporation, leading a group that piloted a virtual development model and Vice President, Drug Development and Chief Medical Officer at Protez Pharmaceuticals, which was acquired by Novartis.  Dr. Young began his pharmaceutical industry career at GlaxeSmithKline where he was Vice President and Global Head, Anti-Infectives Clinical Development. He is the author of numerous peer reviewed articles, reviews and scientific presentations.

Dr. Eliot Ohlstein
Chief Scientific Officer

Dr. Ohlstein has more than 25 years of experience in the pharmaceutical & biotechnology industry. Previously, Dr. Ohlstein was Senior Vice President of the Cardiovascular Urogenital Center of Excellence in Drug Discovery (CEDD) at GlaxoSmithKline.  He was accountable for a research portfolio of both clinical and preclinical drugs.  During his 25-year tenure with GSK, he was involved in taking seven drugs to market and led a clinical research group that achieved eight clinical proof of concepts in seven years.  Dr. Ohlstein left GSK in April 2008 to initiate the spinning-out a new start-up biotech company, Venuvics Pharmaceuticals and became CEO/CSO of this new company.  Upon completing his work with Venuvics, he was a co-founder of AltheRx Pharmaceuticals Inc. where he was CSO and Head of R&D. Dr. Ohlstein sits on the Scientific Advisory Boards for several Biotech companies.  He is currently an adjunct Professor of Pharmacology at Drexel University Medical Schoo

Dr. Jeffrey S. Shaver
Head of Project Management

Dr. Shaver has more than 20 years’ experience in the pharmaceutical industry, encompassing large pharma, generic drug companies as well as biotech companies. Dr. Shaver is also a partner with NeXeption. He previously served as Vice President of Project Management and Operations at Ceptaris Therapeutics (acquired by Actelion) and Vice President of Project Management, Alliances and Information Technology for Ception Therapeutics, a biopharma company (acquired by Cephalon). He has held positions with Dr. Reddy’s Laboratories, Ltd., GlaxoSmithKline, and its predecessor, SmithKline Beecham. Prior to entering the pharmaceutical industry, Dr. Shaver also served in positions of increasing responsibility in engineering management, project management and policy in the United States Air Force. Dr. Shaver is a Distinguished Graduate from the United States Air Force Academy, and earned a M.S. from Purdue University and a Ph.D. from the Massachusetts Institute of Technology.

 

Medical Advisory Board

 

Alan J. Wein, M.D., Ph.D. (Hon.)
Chair, Department of Urology, University of Pennsylvan

Roger R. Dmochowski, M.D.
Department of Urology, Vanderbilt Universi

Martin C. Michel, M.D., Ph.D.
University Medical Center of Johannes Gutenberg, University of Mainz, Germany

Peter K. Sand, M.D.
University of Chicago Pritzker School of Medicin 

David R. Staskin, M.D.
Department of Urology, Tufts University

 

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a nondisclosure agreement (in the form attached hereto as Exhibit A) to have access to key members of Velicept’s former management, intellectual capital and the due diligence “war room” documentation (the “Due Diligence Access”). Each interested party, upon obtaining Due Diligence Access, shall be deemed to acknowledge and represent that (i) it is bound by the bidding procedures described herein; (ii) it has an opportunity to inspect and examine the Velicept Assets and to review all pertinent documents and information with respect thereto; (iii) it is not relying upon any written or oral statements, representations, or warranties of Assignee or Gerbsman Partners, or any of their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of such interested party, and neither Assignee nor Gerbsman Partners (nor any of their respective, staff, agents, or attorneys) make any representations as to the accuracy or completeness of the same.  

TERMS AND CONDITIONS TO SALE

On December 9, 2020, Velicept Therapeutics, Inc., a Delaware corporation, as Assignor, made a General Assignment for the Benefit of Creditors (the “Assignment”) to Velicept (assignment for the benefit of creditors), LLC, a Delaware limited liability company, as Assignee, pursuant to Delaware state law. Please note that with the exception of the relationship created by the Assignment, and despite their similarity in name, Assignor and Assignee have no corporate affiliation to each other. Pursuant to the Assignment, Assignor transferred ownership of all of its rights in tangible and intangible assets (collectively, the “Assets”) to Assignee for sale. Assignee shall sell the Assets and distribute the net proceeds to creditors of Assignor.

Seller has retained the services of Gerbsman Partners and certain former employees to assist with the sale of the assets. They have made themselves available to assist with due diligence and the transition of assets.

As Seller, Velicept (assignment for the benefit of creditors), LLC will oversee the process, select the winning bidder(s) and provide some assistance with the transfer of assets to the buyer(s). This will be a closed bidding process whereby the names of the bidders and the bids will not be disclosed to the other interested parties.

The contemplated transaction will be an asset sale using a standard Asset Purchase Agreement (“APA”). Please note that the general terms under which the assets will be sold, and key terms include:

Sell and convey assets on an “as-is, where-is” basis with all faults;

Sell and convey assets with limited representations or warranties; and

No indemnity for the purchaser of assets and the purchaser will indemnify the Seller the use of the assets after the closing date.

It is important to note that Assignee uses a portion of the proceeds received from the sale for the administration of the estate and distributes the balance to the creditors of the estate. As such Assignee is not able to provide the representations or warranties that a buyer would typically receive. Please bid accordingly and with the acknowledgement that the actual terms and conditions of the final APA are to be consistent and substantially in the form of Assignee’s standard agreement.

Due diligence will begin immediately.  Assignee will provide access to an online data room to interested parties provided that a valid confidentiality and non-disclosure agreement (NDA) is put in place. Each interested party, when executing the NDA, shall be deemed to acknowledge and represent that (i) it is bound by the bidding procedures contained in this Offering Memorandum; (ii) that it has an opportunity to perform due diligence on the assets of Velicept Therapeutics, Inc.; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Velicept Therapeutics, Inc. or Assignee or their respective staff, agents or attorneys; and (iv) all provided documents and reports have been provided solely for the convenience of interested parties and neither Assignor nor Assignee (or their respective staff, agents or attorneys) makes any representations as to the accuracy or completeness of same.  The information contained in this Offering Memorandum has been provided to Assignee by the former management of Assignor. Neither Assignee nor Assignor represent that any of the information contained in this Offering Memorandum is a statement of opinion or fact.  Interested parties are solely responsible for performing their own due diligence to determine the value and status of the assets being offered through independent investigation by themselves and their legal and/or financial advisors.

Dates and Deadlines – Letters of Intent (containing the required information set forth in the paragraph below) should be received by no later than Friday, January 22 , 2021, at 5:00 pm Pacific Time.  Based on the submitted Letters of Intent or otherwise, qualifying parties (which meet the requirements established by the Assignee in its sole and absolute discretion) will be asked to prepare and submit Letters of Intent in the form of a standard Asset Purchase Agreement (an “APA”) (containing the required information set forth in the paragraph below).  Such Letters of Intent should be received no later than Friday January 22, 2021, at 5:00 pm Pacific Time (the “Offer Deadline”), or they may not be considered by the Assignee in its sole and absolute discretion.  The Assignee anticipates rendering a decision shortly after the Offer Deadline and communicating such decision to the parties submitting Letters of Intent.

Notwithstanding the deadlines set forth above, Indications of Interest and/or Letters of Intent may be presented to the Assignees at any time during the due diligence period by email or facsimile (contact information provided below).  Letters of Intent must include the name of the purchasing entity, the purchase price, the assets to be purchased, any contingencies to closing, and any variation from the standard terms and conditions of the APA (such variations shall be noted by submitting a “redline” version against the form APA provided by the Assignee).  A form APA will be provided upon request.  Interested Parties should be aware that any significant material changes to the form APA may jeopardize the transaction and cause the Assignee to reject any such Letters of Intent and reopen the bidding process.  The sale will be an “AS IS”, “WHERE IS” sale, with no representations or warranties whatsoever provided by the Assignee or Velicept Therapeutics, Inc. as to merchantability, fitness or use, and the assets shall be subject to any and all encumbrances and related obligations.

Assignee and former senior employees will also be available to host in-person and web presentations by teleconference with former technical resources that have been retained for this purpose.

Once the announcement has been made that the bidding has ended, the successful bidder (“Buyer”) will be required to close and fund promptly. Exclusivity will not be granted and it is the successful bidders’ sole responsibility to set the closing agenda.

Seller reserves the right to accelerate, delay, cancel or alter the bidding process immediately with or without notifying other bidders, and to withdraw any or all assets from this sale process in its sole discretion. Seller reserves the right to modify, cancel, delay, accelerate or revise the sale at any time with or without notifying interested parties.  Therefore, Interested parties are encouraged to complete due diligence and submit offers as soon as practicable.

All Bids/Letters of Intent should be submitted to steve@gerbsmanpartners.com and tcox@sherwoodpartners.com .

We appreciate your sincere interest in this opportunity and this exciting offering for the assets of the Velicept Therapeutics, Inc.  We look forward to engaging with you and your due diligence teams.

SPECIAL PURPOSE ENTITY DISCLOSURE

Velicept (assignment for the benefit of creditors), LLC (“Assignee” or “Seller”), in its sole and limited capacity as Assignee for the Benefit of Creditors of Velicept Therapeutics, Inc. as Assignee is a special purpose entity under the direction of Assignee  headquartered at 3945 Freedom Circle, Suite 560, Santa Clara, California 95054, United States.

For additional information, please see below and/or contact:

 

Steven R. Gerbsman                                                          

Gerbsman Partners

steve@gerbsmanpartners.com                         

 

Kenneth Hardesty

Gerbsman Partners

ken@gerbsmanpartners.com

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