The End of the Road: New Jersey’s NovaDel Pharma to Dissolve
February 23, 2017
By Alex Keown, BioSpace.com Breaking News Staff
BRIDGEWATER, N.J. – After taking more than a year to sell off its insomnia medication ZolipiMist to Amherst Pharmaceuticals Inc., New Jersey-based NovaDel Pharma (NVD) announced it has dissolved the company.
In a statement released this morning, NovaDel said it met with shareholders earlier this month seeking either the approval of merging with another company or the dissolution of NovaDel. Shareholders in the private company did not want to merge with another company and preferred to shutter the doors of the business. Remaining assets will be distributed to shareholders.
Shareholders are expected to receive one cent per share in cash upon dissolution after payment of outstanding liabilities, the company said in a statement. The dissolution is expected to be completed by June 30.
In 2008, NovaDel received approval from the U.S. Food and Drug Administration for ZolipiMist for the short-term treatment of insomnia characterized by difficulties with sleep initiation. But it wasn’t too many years after the approval that NovaDel ran into financial problems. The company began to explore strategic alternatives to raise capital, which ultimately included the sale of its assets.
In 2013, the company announced it intended to sell the majority of its assets to Suda Ltd. as part of a plan to liquidate the company. As part of that deal, NovaDel received 400,000 in cash, 50,000,000 shares of Suda common stock. NovaDel said it intended to use the proceeds to reduce its liabilities.
The Suda sale didn’t include ZolipiMist nor NitroMist. Mist Pharmaceuticals acquired the NitroMist in a 2013 deal.
In September 2014, the company negotiated a sale of ZolipiMist to Amherst in exchange for assumption of approximately $2.2 million in fees owed to the FDA in relation to ZolipiMist. Additionally, Amherst was expected to pay NovaDel a 10 percent royalty on the sales of ZolipiMist aggregating a maximum payment of $500,000 with an annual minimum of $150,000 according to an announcement at the time of the deal. The sale to Amherst, which includes all patents, trademarks and rights to the drug, was supposed to be the last transaction the company made as it prepared to liquidate its assets. In early 2015, NovaDel reported that Amherst had not yet made any payment to the FDA. Under terms of the agreement with NovaDel, Amherst had until Dec. 31, 2015 to make good on its financial end of the bargain. While the clock ticked on the deadline, NovaDel remained libel for the fees and other liabilities. In February 2016, NovaDel reported that Amherst had met its obligations, but that delay in payment caused additional strain on company finances, which had been met.