Zealand Pharma to acquire insulin pump maker Valeritas for USD 23 million

To accomplish the sale in the most efficient manner, Valeritas and its subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the "Court"). Concurrently, the Company filed a motion requesting approval of a stalking horse asset purchase agreement with Zealand and to initiate a competitive bidding process under Section 363 of the Bankruptcy Code designed to achieve the highest or otherwise best offer for the business.

Valeritas expects to continue operating its business as usual and has obtained a commitment for debtor-in-possession ("DIP") financing from HB Fund LLC. Subject to Court approval, this DIP financing will provide sufficient liquidity to support ongoing operations during the process, including the continued production and sale of V-Go.

"After a thoughtful and thorough review of strategic alternatives, we determined that a process sell our business is the best path forward to maximize value for all stakeholders," said John Timberlake, President and Chief Executive Officer. "During this process, we will remain focused on successfully serving our patients and healthcare providers as we continue to work hard to improve the health of and simplify the lives of people with diabetes."

"We believe that entering the process with an agreed offer from Zealand, the whose stated goal is to work with our highly-talented workforce to build a successful commercial competitor in the U.S. diabetes the market is the most advantageous option for Valeritas. We thank our employees for their continued hard work and commitment towards fulfilling our vision of making V-Go the future standard of care for how patients with type 2 diabetes deliver their insulin," Mr Timberlake added.

The agreement with Zealand Pharma, which was reached following a robust and extensive marketing process, provides total cash consideration of $23 million and includes the assumption of certain liabilities related to the ongoing business. It contemplates that Zealand, at the close, would continue the Company's commercially-focused operations and retain nearly all Valeritas employees.

To ensure a smooth transition into Chapter 11, the Company filed with the Court a series of customary motions seeking to uphold its commitments to its valued employees and other stakeholders during the process. These "first-day" motions include requests to continue to pay wages and provide benefits to employees in the normal course, offer essential customer programs, and otherwise operate the business, as usual, to facilitate the delivery of the product to patients, without interruption.

DLA Piper LLP (US) is serving as legal counsel to Valeritas, Lincoln International is serving as investment banker and PricewaterhouseCoopers LLP is serving as financial advisor.