Vion Pharmaceuticals Files for Chapter 11 Bankruptcy
Company to Continue Efforts to Complete Special Protocol Assessment and Sell its Assets
NEW HAVEN, Conn., Dec. 17 /PRNewswire-FirstCall/ -- VION
PHARMACEUTICALS, INC. (OTC:VION)
(BULLETIN BOARD: VION) , a pharmaceutical company focused on the
development of novel cancer therapeutics, announced that it had
voluntarily filed for bankruptcy under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for
the District of Delaware. Vion is continuing to operate its
business as a debtor-in-possession pursuant to Sections 1107 and
1108 of the Bankruptcy Code.
"We believe that the Chapter 11 process will allow us to
maximize the value of the Company's assets and, if necessary, to
conduct an orderly winding up or liquidation of the Company," said
Alan Kessman, Chief Executive Officer. He added, "We believe that
Onrigin(TM), Triapine® and our other preclinical assets should
continue to be developed, if not by us then by others, as patients
with cancer need additional treatment options as they face this
devastating disease."
The bankruptcy filing became necessary as a result of the
Company's need to conduct an additional randomized trial of its
lead anticancer compound, Onrigin(TM) (laromustine) Injection,
prior to approval for use in the United States. Earlier this week,
the Company disclosed that it had received a complete response
letter from the U.S. Food and Drug Administration ("FDA") relating
to its New Drug Application for Onrigin(TM) filed in February 2009.
In that letter, the FDA advised that the Company complete a
randomized study or studies to define the efficacy and safety of
Onrigin(TM) in the patient population proposed for the indication,
and that the study or studies be designed to demonstrate a survival
benefit that is clearly attributable to Onrigin(TM) with an
acceptable safety profile in a well-characterized patient
population.
The Company also announced that it had filed for a Special
Protocol Assessment ("SPA") with the FDA related to a randomized
trial of Onrigin(TM) sponsored by the Dutch-Belgian Cooperative
Group for Hematology Oncology ("HOVON"). The SPA process provides
for an official FDA evaluation of Phase III study protocols. The
HOVON Phase III trial, which has accrued over 115 patients to date,
combines Onrigin(TM) with standard remission-induction therapy in
patients aged 18-65 with previously untreated acute myeloid
leukemia ("AML") and high-risk myelodysplasia.
The Company does not have sufficient funds to conduct and
complete such a randomized trial and continue its operations, and
has not been able to raise additional capital in part because of
its substantial debt burden. The Company listed total assets of
$19.2 million and total liabilities of $65.0 million as of
September 30, 2009. The Company has $60 million outstanding in
7.75% Convertible Senior Notes due 2012.
During the bankruptcy proceedings, Vion will seek to conclude
the SPA process and sell or merge the Company and/or its key
assets, which include two products in human clinical trials
(Onrigin(TM) and Triapine®), and two preclinical-stage
products, VNP40541, a hypoxia-selective compound, and TAPET(TM), a
drug delivery technology platform. Vion expects that if an asset
sale is consummated that it would be liquidated pursuant to a plan
of liquidation that would be subject to the approval of the
bankruptcy court. In the event of liquidation, whether following an
asset sale or otherwise, any recovery for stockholders would be
highly unlikely.
Vion has retained the services of Roth Capital Partners, LLC to
assist with the sale of the Company and/or its key assets during
the Chapter 11 proceeding. The Company has also retained Fulbright
& Jaworski L.L.P. and Richards, Layton & Finger, P.A. to
serve as its legal advisors in the bankruptcy proceeding.
Additional information about Vion's Chapter 11 case will be
posted along with bankruptcy court documents when these become
available on the website of the court's claims agent at
www.delclaims.com.
For additional information on Vion and its product development
programs, visit the Company's Internet web site at
www.vionpharm.com.
This news release contains forward-looking statements. Such
statements are subject to certain risk factors which may cause
Vion's plans to differ or results to vary from those expected,
including Vion being unsuccessful in selling its assets or engaging
in another transaction in bankruptcy, the FDA not approving Vion's
Special Protocol Assessment for a Phase III randomized trial for
Onrigin(TM) sponsored by HOVON, Vion not obtaining court approval
of its motions in the Chapter 11 proceeding pursued by it from time
to time, Vion's ability to develop, pursue, confirm and consummate
one or more plans of reorganization with respect to the Chapter 11
case, Vion's ability to retain and compensate key executives and
other key employees, Vion's ability to maintain relationships with
its licensor and vendors, Vion's potential inability to obtain
regulatory approval for its products, particularly Onrigin(TM),
delays in the regulatory approval process, particularly for
Onrigin(TM), delays or unfavorable results of drug trials, the need
for additional research and testing, including the need for a
randomized trial of Onrigin(TM) prior to regulatory approval, the
inability to manufacture product, the potential inability to secure
external sources of funding to continue operations, the inability
to access capital and funding on favorable terms, continued
operating losses and the inability to continue operations as a
result, and a variety of other risks set forth from time to time in
Vion's filings with the Securities and Exchange Commission,
including but not limited to the risks attendant to the
forward-looking statements included under Item 1A, "Risk Factors"
in Vion's Form 10-K for the year ended December 31, 2008 and Vion's
Form 10-Q for the quarter ended September 30, 2009. Except in
special circumstances in which a duty to update arises under law
when prior disclosure becomes materially misleading in light of
subsequent events, Vion does not intend to update any of these
forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated
events.
COMPANY CONTACT: Vion Pharmaceuticals, Inc.
Alan Kessman, Chief Executive Officer
Howard B. Johnson, President & CFO
(203) 498-4210
Source: Vion Pharmaceuticals, Inc.
CONTACT: Alan Kessman, Chief Executive Officer, or Howard B.
Johnson,
President & CFO, both of Vion Pharmaceuticals, Inc.,
+1-203-498-4210
Web Site: http://www.vionpharm.com/
Posted: December 2009
