May 1 (Bloomberg) -- Savient Pharmaceuticals Inc. was sued by creditor Tang Capital Partners, an investment fund focusing on the life sciences that contended the drugmaker is insolvent and asked a judge to appoint a receiver.
Tang is East Brunswick, New Jersey-based Savient’s largest creditor, owning $38.9 million in notes, according to a complaint made public today in Delaware Chancery Court in Wilmington. Savient shares fell 21 percent in late trading.
Tang objected to the company’s support of a new gout treatment, Krystexxa. The drug is Savient’s only “significant” product and is “an abject failure,” according to Tang’s complaint. Savient is “gambling tens of millions of dollars in cash each quarter on an impossible dream,” San Diego-based Tang said. The complaint also mentions a “proposed transaction” that’s being kept secret and could allegedly hurt creditors.
Savient said in a February report to the U.S. Securities and Exchange Commission that “physicians may be reluctant to treat patients with Krystexxa because of the potential for extremely severe adverse reactions,” including allergic anaphylaxis, court papers show.
The fund is seeking “an immediate halt to the excessive and unjustifiable hemorrhaging of cash by the company that threatens to inflict irreparable harm on Tang Capital and other creditors,” according to court papers.
Tang asked a judge to order Savient’s directors to manage the company “for the benefit of its creditors,” have its assets liquidated and pay at least $100 million in damages.
In an SEC filing today, Savient officials said “the company believes that the claims alleged by Tang Capital Partners are without merit.” The company said it will fight the lawsuit.
The case is Tang v. Norton, CA7476, Delaware Chancery Court (Wilmington).
To contact the editor responsible for this story: Michael Hytha at email@example.com