aaiPharma gets OK on bidding procedures for $170 million pharmaceutical asset sale

By Caroline Salls

Pittsburgh, June 9 - aaiPharma Inc. obtained approval of the bidding procedures, break-up fee and expense reimbursement and choice of Xanodyne Pharmaceuticals, Inc. as stalking horse bidder for the $170 million sale of all its pharmaceuticals assets and future royalties, according to an order filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

The pharmaceutical assets include pharmaceutical products, the rights to some products being developed, the option to purchase products being developed and a 50% interest in the products being developed.

Xanodyne will receive a $4 million break-up fee and $1.75 million expense reimbursement if it is not the high bidder or if the sale is completed outside of the bidding process. Xanodyne will get half the break-up fee if aaiPharma chooses a stand-alone restructuring.

A qualified bid must be at least $2 million more than Xanodyne's bid.

Also, if the transaction does not close, aaiPharma will reimburse up to $1.5 million of Xanodyne's expenses.

A $7.75 million good faith deposit is required of all bidders.

The deadline for bids is July 7. The auction will be held July 11. The sale hearing will be held July 18.

aaiPharma, a Wilmington, N.C. pharmaceutical company, filed for bankruptcy on May 10. Its Chapter 11 case number is 05-11350.

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