Nearly four months after the FDA placed clinical trials for its lead drug under clinical hold, Inspiration Biopharmaceuticals filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, and has joined with its lead investor to seek a strategic buyer.

Inspiration said it joined with Ipsen to choose an unidentified investment banker to lead an auction sale process, with Inspiration now negotiating terms of engagement. Ipsen said it will include as part of the assets offered for sale its commercialization rights to Inspiration’s products, received in a deal completed on Aug. 21, as well as its OBI-1 manufacturing facility based in Milford, MA. The successful bidder at auction will acquire the facility as well as Inspiration’s preclinical and research programs on recombinant coagulation factors, and global rights to its lead products.

Ipsen has agreed to provide $18.3 million in Debtor-in-Possession financing to Inspiration to fund the bankrupt company’s operations through the sale process.

“We are looking for a strong, committed partner to help bring these promising therapies to people with hemophilia around the globe,” John P. Butler, Inspiration’s CEO, said in a statement. “Inspiration was founded by families that want to bring important new treatment options to patients with hemophilia. The process we are entering into today will allow that vision to become a reality.”

Inspiration’s lead products are IB1001, an intravenous recombinant factor IX in development for the treatment of hemophilia B; and OBI-1, a recombinant porcine factor VIII in development for congenital hemophilia A with inhibitors and acquired hemophilia A. Pivotal clinical trials for OBI-1 are underway, with the first trial in acquired hemophilia nearing the completion of enrollment.

However, on July 10, Inspiration disclosed that two of its late-stage clinical trials for IB1001 were placed on clinical hold by FDA: a Phase III trial evaluating IB1001’s safety and efficacy in treating and preventing bleeding episodes in adults with hemophilia B—a study that completed its primary analysis period—and a Phase III/IIIb study evaluating IB1001’s safety and efficacy to treat and prevent bleeding episodes in previously treated children with hemophilia B.

The hold came after Inspiration reported to the FDA that, during the course of routine laboratory evaluations, it found that a higher-than-expected proportion of individuals treated with IB1001 had developed antibodies to proteins from the Chinese hamster ovary, or CHO, host cells used to manufacture the therapy. At the time, a total of 86 people with hemophilia B had received IB1001 in clinical studies, with no adverse events related to the development of antibodies to CHO protein reported to that time.

IB1001 remains under marketing review with FDA and the European Medicines Agency. If approved, Inspiration said, its lead assets will compete in markets currently valued at over $2.5 billion.

Soon after the FDA clinical hold, Ipsen restructured an earlier financing deal with Inspiration by agreeing to give Inspiration $30 million upfront, as well as another $20 million tied to the company completing a $30 million external financing round by Sept. 30, and $165 million tied to Inspiration meeting various milestones. The external financing was never raised, Ipsen later disclosed.

In return for the money, Ipsen gained rights to commercialize IB1001 and OBI-1 in Europe, Russia, China, Australia and other undisclosed countries, with responsibility for future regulatory filings in those regions, while Inspiration was left with commercialization rights in the Americas, Japan, India, the Middle East, South Africa, Taiwan, and other undisclosed countries.

However, Ipsen gave up its option to acquire Inspiration under the original 2010 agreement between the companies. Back then, Ipsen took a 20% stake in Inspiration for $85 million upfront, then agreed to pay another $174 million—boosting its stake to 47%—based on undisclosed milestones, with a further option to wrest full control of Inspiration.

Also under the original $259 million deal, Ipsen licensed the OBI-1 hemophilia therapy it developed to Inspiration for $50 million in convertible notes and a 27.5% royalty on future OBI-1 sales, while the companies agreed to pursue late-stage clinical trials on OBI-1 and  IB1001.

“We believe Inspiration’s portfolio, including OBI-1, could exceed sales of $1 billion in the next 10 years,” Jean-Luc Bélingard, Ipsen’s then-chairman and CEO, said at the time in a statement.

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