Sangamo Therapeutics - Chapter 11 Case Summary

Business Description

Headquartered in Richmond, California, Sangamo Therapeutics, Inc. ("Sangamo," the "Company," or the "Debtor") is a genomic medicine company focused on translating science into medicines for patients afflicted with serious neurological diseases. Genomic medicine refers to therapies that treat disease by directly targeting the genes that cause or drive it, rather than addressing its symptoms alone.

In 2023, Sangamo announced a strategic transformation into a neurology-focused genomic medicine company centered on two complementary areas:

• Epigenetic regulation therapies: precision medicines designed to treat serious neurological diseases.
• Novel engineered AAV capsids: adeno-associated virus delivery vehicles designed to carry those therapies to their intended neurological targets.

These efforts are built on three proprietary technology platforms — the zinc finger protein ("ZFP") platform, the SIFTER AAV capsid engineering platform, and the Modular Integrase ("MINT") genome editing platform — which together form the scientific and technological foundation of the business. Sangamo applies these platforms across a pipeline of wholly owned, partnered, and other programs targeting serious diseases with limited or no adequate treatment options.

Sangamo's Chapter 11 case is anchored by two parallel sale processes, each supported by a stalking horse bidder:

• The Lilly Sale: a proposed sale to Eli Lilly and Company, through its wholly owned subsidiary Merope Acquisition Sub, LLC, of the \"Lilly Assets\" — the Company's Technology Platforms, including its AAV capsid engineering platform (and the proprietary STAC-BBB capsid and related next-generation variants), the Prion Disease Program, related intellectual property, and the right to receive certain future milestone and royalty payments under its Outlicensing Agreements.
• The Astellas Sale: a parallel sale to Astellas Gene Therapies, Inc. of the Fabry Disease Program — one of the Company's most advanced wholly owned assets — and related assets.

Certain assets fall outside both transactions, including the Chronic Neuropathic Pain Program, the Hemophilia A Program, the Sickle Cell Disease Program, and the Tregs Platform. The Debtor intends to evaluate all available options for these assets through a postpetition marketing and sale process, under which it is also seeking authority to designate one or more additional stalking horse bidders.

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Corporate History

Sangamo was incorporated in the State of Delaware in June 1995 and completed its initial public offering of common stock on the Nasdaq National Market on April 6, 2000.

The Company maintains three wholly owned subsidiaries, none of which are part of the Chapter 11 proceedings:

• Sangamo Therapeutics France S.A.S. (France);
• Sangamo Therapeutics UK Ltd. (United Kingdom, formerly Gendaq Limited); and
• Ceregene, Inc. (Delaware).

In 2023, Sangamo repositioned itself as a neurology-focused genomic medicine company, narrowing its strategic focus to epigenetic regulation therapies and engineered AAV capsid delivery. Against a backdrop of liquidity pressure, the Company undertook a series of restructuring actions that progressively reduced its operating footprint and headcount — including the closure of its Valbonne, France facility and efforts to exit its Brisbane, California facility — culminating in the Chapter 11 filing and the proposed Lilly and Astellas sales.

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Operations Overview

Sangamo's operations center on three proprietary technology platforms that collectively form the scientific and technological foundation of its business and support a pipeline of clinical- and preclinical-stage programs.

Core Technology Platforms

• ZFP Technology Platform: Zinc finger proteins ("ZFPs") are naturally occurring human proteins that regulate the genome by binding to specific DNA sequences within or near a gene to activate or repress its expression. Sangamo engineers ZFPs into precision therapeutic tools — zinc finger epigenetic regulators — that can selectively silence or upregulate a targeted human gene.
• SIFTER Technology Platform: An AAV capsid engineering platform (short for "Selecting In Vivo For Transduction and Expression of RNA") developed to address one of the central challenges in treating neurological disease: delivering genomic medicines to the brain and central nervous system. SIFTER screens tens of millions of unique capsid variants across successive rounds of testing to identify those with superior delivery to the brain and spinal cord.
  • The process yielded the Company's lead capsid, STAC-BBB, which has demonstrated the ability to cross the blood-brain barrier in nonhuman primates and mice following intravenous administration.
  • It also produced the STAC-102 and STAC-103 capsids, designed for alternative central nervous system delivery routes with improved performance relative to existing benchmark capsids.
• MINT Technology Platform: A next-generation genome editing technology (Modular Integrase) designed to integrate large sequences of DNA into the genome — potentially allowing a single medicine to treat patients with different mutations in the same disease-causing gene. Unlike certain other approaches, MINT is designed to make these integrations without creating double-stranded DNA breaks and to be compatible with multiple methods of delivery.

Pipeline Programs

Sangamo's pipeline spans wholly owned programs, programs advanced with licensing and collaboration partners, and other programs being positioned for commercialization.

Wholly owned programs include:

• Fabry Disease Program (ST-920): A clinical-stage gene therapy for Fabry disease — a rare, inherited metabolic disease in which a mutated enzyme causes a harmful buildup of fatty substances, progressively damaging the heart, kidneys, and nervous system. Sangamo initiated a rolling FDA Biologics License Application ("BLA") submission in December 2025 under the accelerated approval pathway, with full submission potentially completing as early as the third quarter of 2026. This program is the subject of the Astellas Sale.
• Prion Disease Program (ST-506): A preclinical-stage investigational therapy targeting prion disease — a rare, rapidly progressive, and fatal neurological disorder in which a normally harmless brain protein misfolds and destroys brain tissue. Designed to reduce production of this protein, the program has advanced through required animal safety studies, preparations to seek authorization for human trials, and engagement with the UK medicines regulator on study design and safety requirements. It forms part of the Lilly Assets.
• Chronic Neuropathic Pain Program (ST-503): A clinical-stage investigational therapy for small fiber neuropathy ("SFN"), a condition causing persistent, often debilitating pain. It targets and reduces the activity of Nav1.7, a sodium ion channel responsible for transmitting pain signals. The FDA authorized human clinical trials in November 2024, and Sangamo has since activated seven clinical sites engaged in patient recruitment and enrollment.

Partnered programs are advanced under licensing and collaboration arrangements (the "Outlicensing Agreements"), which collectively represent potential recurring licensing revenue, milestone payments, and royalties on commercial sales:

• Eli Lilly and Company (April 2025): A global capsid delivery license for intravenously administered central nervous system medicines, granting Lilly a worldwide exclusive license to STAC-BBB for one target, with the right to add up to four additional targets. Technology transfer for the initial target was completed in April 2025, with Lilly solely responsible for all development, regulatory, manufacturing, and commercialization activities.
• Genentech, Inc. (August 2024): A global epigenetic regulation and capsid delivery license for neurodegenerative diseases, granting Genentech exclusive worldwide rights to Sangamo's zinc finger repressors directed to the tau gene (implicated in Alzheimer's disease and related conditions) and a second undisclosed neurological target, together with STAC-BBB for delivery to those targets.
• Astellas Gene Therapies, Inc. (December 2024): A global capsid delivery license for neurodegenerative diseases, granting Astellas a worldwide exclusive license to STAC-BBB for one target, with the right to add up to four additional targets and a one-time option to exchange the STAC-BBB license for a substitute capsid during the initial three-year term.
• Alexion Pharmaceuticals, Inc.: Originally entered into with Pfizer in December 2017 and assigned to Alexion in September 2023, this exclusive research collaboration and license covers gene therapy products using zinc finger transcriptional regulators to treat amyotrophic lateral sclerosis (ALS) and frontotemporal lobar degeneration (FTLD) linked to certain mutations, with Alexion responsible for subsequent development, manufacturing, and commercialization.
• Takeda Pharmaceutical Company Limited (January 2012, amended September 2015): A collaboration and license for monogenic diseases under which Takeda holds an exclusive, worldwide license to zinc finger therapeutics for treating Huntington's disease.
• Sigma-Aldrich Corporation (2007, amended October 2009): An exclusive license to Sangamo's zinc finger technology for research reagent products and services, zinc finger-modified cell lines for commercial protein production, and certain transgenic animals.
• Other partnerships: Sangamo has additionally licensed its technology in fields such as plant agriculture and research reagents to partners including Corteva AgriScience (formerly Dow AgroSciences LLC) and Open Monoclonal Technology, Inc. (now Ligand Pharmaceuticals Incorporated), and has granted Miltenyi Biotec rights in the cell therapy field.

Other programs, for which the Company is pursuing commercialization opportunities, include:

• Hemophilia A Program (SB-525): A clinical-stage, liver-directed AAV gene therapy for severe Hemophilia A, an inherited bleeding disorder marked by insufficient blood-clotting protein. Previously developed with Pfizer under a 2017 collaboration that Pfizer terminated for convenience effective April 2025, the program reverted to Sangamo via an exclusive, worldwide, royalty-bearing, sublicensable license; the Company is seeking a commercialization partner.
• Sickle Cell Disease Program (BIVV003): A clinical-stage investigational gene therapy candidate for sickle cell disease, an inherited blood disorder in which abnormal hemoglobin causes red blood cells to sickle, leading to pain episodes, organ damage, and other severe complications.
• Tregs Platform: A clinical-stage program and two early-stage development programs focused on regulatory T cell (Treg)-based therapeutics for autoimmune and inflammatory conditions.

Intellectual Property

Sangamo protects its proprietary rights through a combination of patents, copyrights, trademarks, proprietary know-how, trade secrets, and confidentiality, materials transfer, research, and licensing agreements. Its portfolio comprises approximately 90 patent families directed to the design, composition, and use of zinc finger proteins and other technologies underlying its programs.

• The Company is also licensor under numerous out-license agreements, including exclusive worldwide licenses to STAC-BBB granted to Genentech, Astellas, and Lilly for defined fields of use; exclusive worldwide licenses to zinc finger repressors directed to specific neurological targets granted to Genentech; and exclusive worldwide rights to zinc finger therapeutics for Huntington's disease granted to Takeda.

Manufacturing

Sangamo relies primarily on contract manufacturing organizations ("CMOs") to produce preclinical and clinical supply for its pipeline, and intends to continue using third parties for later-stage clinical trials and commercial-scale manufacturing of any approved product. The Company maintains a technical operations staff across process and analytical development, quality control, quality assurance, supply chain, project management, and external manufacturing to oversee its CMOs, support regulatory filings, and supply clinical trials.

• This reliance on external manufacturers follows the closure of Sangamo's Valbonne, France facility and the anticipated closure of its Brisbane Facility, both undertaken as part of the Company's restructuring initiatives.

Real Property

As of the Petition Date, the Debtor was party to three real property leases, all located in California:

• Canal Offices (Richmond): The Debtor's corporate headquarters, comprising approximately 59,485 square feet of research and office space at 501 Canal Blvd., Suite A100.
• West Cutting Offices (Richmond): Approximately 7,700 square feet of office space previously occupied at 1003 West Cutting Boulevard under a separate lease.
• Brisbane Facility: Approximately 103,089 square feet of office and R&D laboratory space at 7000 Marina Boulevard. The Company commenced efforts to close the facility in early 2024 and has since marketed it extensively for sublease.
  • Under an August 2025 lease amendment, the landlord was authorized to draw on an existing $1.5 million letter of credit to offset rent from September through November 2025 (with the credit to be reinstated by December 31, 2026), and 90% of monthly base rent otherwise due between December 2025 and December 2026 was deferred on an interest-free basis, payable in full by January 5, 2027.

Employees and Workforce Reductions

Sangamo has implemented a series of significant workforce reductions in recent years as it worked to lower operating expenses and preserve liquidity:

• The April 2023, November 2023, and France Restructurings together reduced the workforce by approximately 365 roles.
• In March 2026, the Company executed a reduction in force (the "March RIF") eliminating approximately 22 roles and furloughing 14 employees.
• In connection with the Chapter 11 filing and proposed sale transactions, a June 2026 reduction in force (the "June RIF") cut the workforce from 128 full-time employees (126 in the United States and two in the United Kingdom) to 77 employees retained to support essential operations, administer the Chapter 11 case, and support the sale transactions. Certain affected employees agreed to transition from full-time employment to part-time independent contractor arrangements.

Following the June RIF, the Debtor's remaining workforce consists solely of employees specifically identified and selected by Lilly and Astellas in connection with their respective sales, together with those employees and independent contractors needed to assist with administration of the Chapter 11 case.

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Prepetition Obligations

As of the Petition Date, the Debtor has no funded debt obligations—including no prepetition secured debt, unsecured notes, or credit facility obligations. The Debtor’s prepetition liabilities consist principally of general unsecured trade, lease, and employee-related claims, summarized below.

General Unsecured Obligations

• Trade Payables: Approximately $19.2 million owed to vendors and service providers, including amounts owed to contract manufacturing organizations (CMOs) and other research and development service providers.
• Lease Obligations: Approximately $4.0 million in rent obligations under the Debtor’s real property leases, including deferred rent previously accumulated under the Brisbane Lease Amendment.
• Employee Obligations: Various accrued but unpaid amounts owed to current and former employees, consisting of:
  • Approximately $9.4 million in annual performance bonuses for fiscal years 2024 and 2025, accrued in the ordinary course but unpaid as of the Petition Date.
  • Approximately $3.7 million in severance obligations to employees terminated in connection with the March and June reductions in force (the March RIF and the June RIF).
  • Approximately $2.3 million in merit-based salary increases for fiscal year 2025, accrued but not funded as of the Petition Date.
  • Approximately $900,000 in accrued but unpaid COBRA-covered benefits following employee terminations.

Liquidity and Postpetition Financing

• The Debtor held approximately $5.5 million in cash on hand as of the Petition Date. Although the Debtor carries no funded debt, this cash is insufficient to fund the administration of the Chapter 11 Case and the proposed sale transactions without additional financing.
• To bridge this gap, the Debtor has entered into a term sheet with Northridge ATM, LLC (together with its subsidiaries, affiliates, designees, and assignees, “Northridge”), as DIP lender, for a postpetition debtor-in-possession term loan facility.
  • The Debtor is seeking authority to borrow up to $30 million on a senior secured superpriority basis (the “DIP Facility”).

Equity

• The Debtor is a publicly traded company with approximately forty-nine record holders and 414,471,132 outstanding shares of common stock as of June 8, 2026.
• Sangamo’s common stock currently trades on the OTCQB Venture Market under the ticker symbol “SGMO.”

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Events Leading to Bankruptcy

Strategic Transformation and Erosion of the Revenue Base

• In 2023, Sangamo announced a strategic transformation, repositioning itself as a neurology-focused genomic medicine company centered on epigenetic regulation therapies and novel engineered AAV capsid delivery technology. While the pivot represented a deliberate effort to build a focused, high-value business around the Company's most differentiated scientific capabilities, its timing proved damaging:
  • The transformation coincided with the loss of each of the Company's principal collaboration revenue streams—historically the foundation of its revenue base—including those from Biogen, Novartis, Kite, and Pfizer.
  • These losses unfolded against a broader post-COVID biotech investment contraction that sharply reduced publicly available capital.
• The resulting revenue shortfall placed the Company under severe financial pressure, compounded by its inability to secure a commercialization partner for the Fabry Disease Program outside of a Chapter 11 process—a transaction that would have provided critical capital to fund the neurology pipeline and broader operations. As each successive quarter passed without resolution of the Fabry partnership process, the Company's liquidity position deteriorated and its strategic options narrowed.

The 2023 Strategic Restructurings

• The Company executed two successive workforce reductions in 2023 to lower operating costs and sharpen its strategic focus:
  • The April 2023 Restructuring, intended to concentrate resources on the preclinical neurology epigenetic regulation portfolio, a potential Phase 3 Fabry trial, and an ongoing renal transplant rejection study, eliminated approximately 110 roles—roughly 23% of the U.S. workforce—split evenly between full-time and contracted employees. Together with other cost initiatives, it was expected to generate annualized savings of approximately $31 million.
  • The November 2023 Restructuring (approved October 11, 2023) further advanced the neurology-focused transformation, eliminating 162 U.S. roles—108 full-time and 54 contracted—or approximately 40% of the U.S. workforce at the time.
• In connection with the November 2023 Restructuring, the Company began closing its Brisbane Facility—its primary internal manufacturing site—and transitioned its headquarters to Richmond, California effective January 1, 2024. The Company subsequently entered into the Brisbane Lease Amendment in August 2025.

Wind-Down of French Operations

• Beginning in mid-2023, the Company sought additional investors or collaboration partners for its Valbonne, France-based cell therapy programs but was unable to identify a transaction on acceptable terms. Accordingly, on March 1, 2024, the Board approved the wind-down of all French research and development activities and the closure of the Valbonne cell therapy manufacturing facility and research laboratories (the "France Restructuring"), which eliminated all 93 roles in France—approximately 24% of the Company's total global workforce.

Termination of Major Collaboration Agreements

• As the Company pursued its transformation, it simultaneously lost each of the major collaboration agreements that had historically driven its revenues:
  • In June 2023, Novartis and Biogen each terminated their respective collaboration agreements for convenience following internal strategic reviews, extinguishing the Company's entitlement to milestone payments and royalties and ending each counterparty's development and reimbursement obligations.
  • The collaboration agreement with Kite Pharma, Inc. expired by its terms in April 2024 and was not renewed.
• The combined impact was severe: revenues fell from $176.2 million in 2023 to $57.8 million in 2024, a decline of $118.4 million driven primarily by the elimination of the Biogen, Novartis, and Kite collaboration revenues.
• The pressure intensified in December 2024, when Pfizer terminated the Pfizer Collaboration Agreement for convenience after electing not to pursue regulatory approval or commercialization of a Hemophilia A gene therapy that was ready for submission. The termination extinguished all licenses and rights granted to Pfizer and eliminated the Company's entitlement to future royalties and milestones—including $220 million in milestone payments the Company had anticipated would fund its neurology pipeline. The announcement also triggered an approximately 50% decline in the Company's stock in the following days, effectively foreclosing equity financing as a meaningful source of capital.

Efforts to Extend Cash Runway

• Facing mounting losses and a shrinking revenue base, the Company executed a series of equity financings to extend its cash runway while pursuing partnerships and strategic alternatives, overseen by the Board's Financing Committee (formed in 2017 and vested with full authority over the Company's equity financings):
  • In 2023, the Company raised approximately $15.1 million in net proceeds under its at-the-market program, and stockholders approved an increase in authorized common stock to support continued raises.
  • In March 2024, a registered direct offering generated approximately $21.9 million in net proceeds, followed by a further stockholder-approved increase in authorized shares in June 2024.
  • Between 2025 and early 2026, the Company raised an aggregate of approximately $100.1 million through at-the-market sales and two underwritten public offerings.
• Although these transactions provided meaningful liquidity relief, the proceeds of each successive offering were insufficient to resolve the Company's long-term liquidity challenges.

New Partnerships and Licensing Agreements

• In parallel with its equity raises, the Company actively licensed its proprietary technology to generate additional capital:
  • On August 2, 2024, Sangamo entered into the Genentech License Agreement, granting Genentech exclusive licenses to zinc finger repressors directed to the tau gene and a second undisclosed neurology target, plus an exclusive license to STAC-BBB for those targets. Sangamo received a $40.0 million upfront fee in August 2024 and a $10.0 million technology-transfer milestone in October 2024, and became eligible for up to $1.9 billion in milestones plus tiered royalties.
  • In December 2024, the Astellas License Agreement granted Astellas a worldwide exclusive license to STAC-BBB for one neurological target (with the right to add up to four more), with a $20.0 million upfront payment and eligibility for up to $1.3 billion in milestones plus tiered royalties.
  • On April 2, 2025, the Lilly License Agreement granted Lilly a worldwide exclusive license to STAC-BBB for one CNS target (with the right to add up to four more), with an $18.0 million upfront payment and eligibility for up to $1.4 billion in milestones plus tiered royalties.
• Notwithstanding the incremental liquidity these transactions generated, none provided upfront payments sufficient to fully fund the Company's ongoing and planned operations.

Prepetition Efforts to Secure a Fabry Commercialization Partner

• Beginning in 2022, Sangamo undertook a multi-year effort to secure a commercialization partner for its Fabry Disease Program—a transaction that would have provided long-term revenue to fund operations and preserve going-concern status. The Company pursued a dual-track strategy of advancing its patient study to generate compelling clinical data while seeking regulatory clarity in both the United States and Europe.
• The marketing process was extensive but ultimately unsuccessful:
  • From 2022 to 2024, Bank of America conducted broad outreach to top-tier biotech and pharma companies. Sangamo presented to five companies; one advanced to formal diligence but withdrew after being unable to identify an internal champion.
  • From 2024 to 2026, Evercore expanded the effort, contacting more than twenty companies—including large-cap pharma, specialty rare disease companies, and healthcare-focused private equity firms. Nine parties participated in management presentations, seven proceeded to formal diligence, and the process generated three term sheets, with one party submitting three successive revised proposals and another submitting nine.
  • None of these discussions resulted in a completed transaction: one party could not meet the requested economic terms; another was acquired and withdrew to refocus its pipeline; and the party that progressed furthest withdrew before signing over board-level concerns that the FDA might require an entirely new, large-scale clinical trial as a precondition to approval.
• Those concerns reflected broader conditions in the gene therapy landscape, where rapid FDA leadership transitions and guidance perceived as internally inconsistent materially elevated the perceived risk of investment—making written FDA confirmation of the regulatory pathway essential before any transaction could close.
• The Company made significant progress on regulatory clarity:
  • Following a productive June 2024 meeting with the European Medicines Agency, an October 2024 FDA meeting yielded written minutes confirming that data from the Company's existing patient study could serve as the primary basis for marketing approval—a determination the Company believed would accelerate approval by roughly three years and eliminate the need for an additional large-scale trial.
  • In October 2025, a second FDA meeting reaffirmed the accelerated approval pathway in writing. Encouraged, the Company began preparing a rolling marketing application, intensified its partner outreach, and in December 2025 began submitting initial portions of the application while maintaining dialogue with European regulators, targeting a complete submission as early as summer 2026, subject to additional funding.
  • In early 2026, the Company presented detailed patient study results across four presentations at the 22nd Annual WORLDSymposium to raise the program's profile and renew partner interest.
• To eliminate the residual concern over a potential new trial, the Company retained First Principles Strategies and regulatory counsel Frank Sasinowski of Hyman, Phelps & McNamara, P.C., submitting formal correspondence to the FDA in April 2026. In May 2026, the Acting Director, Office of Therapeutic Products, of the FDA provided written confirmation that no separate large-scale clinical trial involving additional patients would be required as a precondition to approval—directly addressing the principal concern that had driven multiple prospective partners away. Although the Company could not complete a Fabry transaction within a timeframe that addressed its liquidity needs before the Petition Date, this confirmation proved instrumental in renewing interest, most notably from Astellas.

Deterioration of the Company's Financial Condition

• Over fiscal years 2023 through 2025, the Company sustained aggregate net losses exceeding $478 million, while annual revenues fell from $176.2 million in 2023 to $39.6 million in 2025—a decline of more than 77%—driven substantially by the loss of collaboration revenues from Novartis, Biogen, Kite, and Pfizer.
• Liquidity contracted in parallel: cash, cash equivalents, and marketable securities fell from $307.5 million at December 31, 2022 to $20.9 million at December 31, 2025. The Company's financial statements carried going-concern determinations in each successive annual and quarterly report during this period.
• The Company also struggled to maintain Nasdaq's minimum bid price requirement. On April 28, 2026, Nasdaq notified the Company of its determination to delist its common stock; trading was suspended and the shares began trading on the OTCQB Venture Market on May 5, 2026.

The Stalking Horse Sale Transactions

• The Lilly Sale. Building on Lilly's familiarity with Sangamo's proprietary capsid technology under the Lilly License Agreement, the parties negotiated a broader acquisition of the Company's neurological technology platform assets. Those negotiations produced the Lilly Stalking Horse APA, under which Lilly's wholly owned subsidiary, Merope, agreed to serve as stalking horse bidder for the Lilly Assets at a purchase price of $50 million plus the assumption of certain liabilities.
• The Astellas Sale. Astellas, which had held a commercial relationship with Sangamo since the December 2024 Astellas License Agreement and had evaluated the Fabry Disease Program during the Evercore process, initially declined to proceed amid the same concern over a potential new clinical trial.
  • That concern was definitively resolved by the FDA's May 2026 written confirmation, which renewed Astellas's interest and prompted it to re-engage. The resulting Astellas Stalking Horse APA names Astellas as stalking horse bidder for substantially all assets of the Fabry Disease Program—principally isaralgagene civaparvovec (ST-920) and related intellectual property, inventory, tangible personal property, and contracts—structured to avoid overlap with the Lilly Assets.
  • Aggregate consideration consists of $25 million in cash at closing plus up to an additional $25 million upon achievement of specified milestones.

The DIP Facility

• In early June 2026, the Company engaged Raymond James & Associates, Inc. as investment banker to evaluate strategic alternatives—including the assets subject to the Lilly and Astellas stalking horse APAs—and to identify qualified bidders capable of generating the highest and best value for the estate.
• Raymond James also ran an accelerated process to secure postpetition financing, contacting twenty-one financing parties across the institutional lending and special situations markets:
  • Northridge (associated with JMB Capital Partners) was the most responsive, submitting three successive proposals, including a formal term sheet on June 16, 2026. The Company also worked with Lilly on a DIP proposal in its capacity as prospective buyer and considered a preliminary, non-binding third-party proposal received on June 20, 2026.
  • After evaluating each proposal, the Debtor and the Restructuring Committee—in consultation with Raymond James and legal advisors—determined that the Northridge proposal was the best financing option reasonably available, providing maximum flexibility to pursue the dual-track sale process.
• The DIP Facility is a non-amortizing, senior secured superpriority term loan of up to $30 million, available in multiple draws, including $10.5 million upon entry of the interim DIP order and the full amount upon entry of the final DIP order. It bears interest at 12.0% per annum (with a 2.0% default rate premium), carries a commitment fee, exit fee, and one-time work fee, and matures on the earliest of December 30, 2026 or certain events, including a plan effective date, a sale of substantially all assets, or dismissal or conversion of the case. Substantially all of the Debtor's assets will be encumbered by DIP liens granted to Northridge.

Governance Oversight and the Decision to File

• On May 29, 2026, the Board adopted resolutions forming a Restructuring Committee of four directors—H. Stewart Parker, Robert F. Carey, Peg Horn, and John H. Markels, Ph.D.—to oversee the Company's financial, operational, and organizational restructuring and sale processes with a mandate to maximize value for all stakeholders. The Committee was empowered to monitor the Company's financial and operational position, develop and recommend restructuring strategies, oversee management and advisors, and evaluate the feasibility and fairness of proposed plans. At the same meeting, the Board authorized the retention of financial, legal, and restructuring advisors for the Chapter 11 process.
• On June 18, 2026, having evaluated all available alternatives and finding no viable out-of-court path to address its liquidity needs, the Board—with input from the Restructuring Committee and its advisors—determined that commencing a Chapter 11 proceeding and conducting the contemplated sale transactions under court supervision represented the best available means of maximizing value for creditors and other stakeholders. On the Petition Date, the Debtor commenced the Chapter 11 Case to implement the proposed sale transactions through a fair, transparent, and value-maximizing process.