BioXcel Therapeutics entered chapter 11 with a Teva stalking-horse proposal that separates $57.5 million in cash at closing from up to $67.5 million in contingent milestone payments. The filed asset purchase agreement ties the development payment to the timing of FDA approval for at-home use of IGALMI. Later approval can reduce that payment; commercial milestones apply only under specified conditions.
BioXcel and two subsidiaries filed chapter 11 petitions on August 27, 2026, in the U.S. Bankruptcy Court for the District of Delaware, case No. 26-11360. The debtors sought up to $19 million in DIP financing to support the sale process. This account describes the agreements and motions filed through August 28, 2026; the proposed transaction was subject to higher or better offers and contractual closing conditions.
BioXcel Therapeutics, Inc. (3 jointly administered debtors)
Court
U.S. Bankruptcy Court, District of Delaware
Case Number
26-11360
Petition Date
August 27, 2026
Case Path
Chapter 11 asset sale under section 363
DIP Facility
Up to $19 million from existing secured lenders (13% fixed interest, five-month maturity, $9.5 million available on interim order, pro rata roll-up of prepetition debt)
Stalking Horse Buyer
Teva Pharmaceuticals International GmbH ($57.5 million cash plus up to $67.5 million in contingent milestones)
Claims Agent
Stretto
Case Snapshot
TRANQUILITY Misconduct and the Clinical Reprioritization
BioXcel's only source of revenue is IGALMI (dexmedetomidine) sublingual film, approved by the FDA in April 2022 for acute agitation associated with schizophrenia or bipolar I or II disorder. IGALMI generated $0.6 million in revenue in 2025, down from $2.3 million in 2024, and the company reported a $27.4 million net loss for the six months ended June 30, 2026.
The company's TRANQUILITY Phase 3 trial, testing BXCL501 for agitation associated with Alzheimer's dementia, produced positive topline results on June 29, 2023, but the same announcement disclosed that a contract research organization's principal investigator had submitted a falsified email to the FDA during a clinical-site inspection. BioXcel's stock price fell about 64% in a single day after the disclosure, which the company says impaired its ability to raise the equity needed to fund both the at-home IGALMI label expansion and a restart of the TRANQUILITY program. BioXcel's shares had fallen about 55% during 2026 before the filing, on top of the 2023 decline.
In August 2023, the board approved a Clinical Reprioritization that concentrated resources on the at-home SERENITY program while pausing TRANQUILITY, BXCL502, BXCL503, BXCL504, and further BXCL701 development held through OnkosXcel. BioXcel reduced its workforce by approximately 15% in May 2024 and by a further 28% in September 2024, reducing headcount from about 60 employees to 25 full-time employees as of the petition date.
Credit Agreement and Path to chapter 11
BioXcel entered its senior secured Credit Agreement and a companion revolving instrument, the RIFA, in April 2022, providing for up to $260 million in aggregate financing from funds affiliated with Oaktree Capital Management and the Qatar Investment Authority, with Oaktree Fund Administration, LLC serving as administrative agent. The company drew $70 million under the initial Credit Agreement tranche and $30 million under the RIFA, for $100 million in total funded proceeds; the RIFA was terminated in December 2023 and its balance converted into term loans.
With payment-in-kind interest and amendment fees accruing, BioXcel's principal indebtedness grew to approximately $112 million as of the petition date, up from $101.25 million originally funded. The loans bear 13.0% annual cash interest, mature April 19, 2027, and are secured by substantially all of the debtors' assets. The company also estimates about $17 million of unpaid trade and other ordinary-course obligations, much of it owed to current or former professionals.
As liquidity tightened, the lenders granted successive rounds of covenant relief. A March 2026 Ninth Amendment waived the covenant barring a "going concern" qualification in BioXcel's 2025 audited financials and cut the minimum liquidity covenant from $15 million to $12.5 million, in exchange for a $2.5 million principal prepayment and warrants issued to the lenders. A July 2026 Tenth Amendment then deferred principal and interest that had been due June 30, 2026, reduced the minimum liquidity covenant to $7.5 million, and set a July 31, 2026 deadline for BioXcel to enter a definitive strategic transaction.
To bridge liquidity while that process continued, BioXcel completed a registered direct offering in March 2026 that generated approximately $6.9 million in net proceeds through placement agent Rodman & Renshaw LLC, and the lenders separately provided $1.25 million in prepetition bridge financing ahead of the filing. The petition listed estimated liabilities of $100 million to $500 million and assets of $10 million to $50 million.
DIP Financing and Prepetition Bridge Loan
The debtors are seeking court approval of up to $19 million in new-money debtor-in-possession financing from the existing secured lenders, with up to $9.5 million available upon entry of an interim order and the remainder upon a final order. The facility bears a fixed 13% annual interest rate, matures five months from closing, and includes a pro rata roll-up of prepetition Credit Agreement obligations as new money is funded. The debtors state the DIP proceeds will fund case administration, ongoing operations, and the sale process, and that the facility was sized to provide only the financing needed to consummate an expedited sale rather than sustain a protracted case.
Teva Stalking Horse Agreement and Sale Process
BioXcel engaged MTS Health Partners as investment banker in the fall of 2025 and Rodman & Renshaw as placement agent to run a dual-track process seeking both new equity capital and a buyer or strategic partner. MTS contacted more than 40 potential acquirers, of which 12 held meetings and seven signed nondisclosure agreements and received data-room access, according to the declaration of MTS partner Daun Chung. Cooley LLP and Young Conaway Stargatt & Taylor, LLP are serving as the debtors' legal counsel in the case.
On July 1, 2026, the board formed a Strategic Process Committee, initially chaired by director David Mack and later joined by director Susan Atkins following her August 12, 2026 appointment, with exclusive authority to negotiate any financing, sale, or chapter 11 filing. On August 12, 2026, the board also formed a Claims Committee, with Atkins as its sole member, to investigate potential claims against current and former officers, directors, and other third parties.
Under the stalking-horse APA, Teva would pay $57.5 million at closing, assume specified liabilities, and potentially make additional milestone payments. The four development-payment tiers depend on when the FDA approves the pending supplemental new drug application for at-home use of IGALMI. Only one development payment is payable, and closing must occur before any such payment is due.
FDA approval by November 21, 2026: 67.5 million dollars. November 22, 2026 through February 28, 2027: 55 million. March 1 through May 31, 2027: 20 million. June 1 through November 30, 2027: 5 million. Only one development payment is payable, subject to closing and the agreement.
Development payment by FDA approval window
USD millions
By Nov 21, 202667.5
Nov 22, 2026–Feb 28, 202755
Mar 1–May 31, 202720
Jun 1–Nov 30, 20275
View exact chart values
Development payment by FDA approval window: exact values
If approval is not received by February 28, 2027, the agreement also provides for commercial milestone payments. One $10 million payment depends on first achieving annual net sales of at least $250 million by December 31, 2035. A further $10 million depends on first reaching $500 million in annual net sales by that date. Neither commercial payment is payable if either of the two highest development milestone events is achieved.
The chart shows the stated development amounts before deductions. APA section 2.3.2 permits specified third-party intellectual-property payments to reduce an unpaid milestone, subject to contractual limits and exclusions, including a cap of half the otherwise payable milestone amount.
The August 28 motion requested bid protections consisting of a $5 million break-up fee if the FDA approves the sNDA before the agreement terminates, or $1.15 million if it has not, plus expense reimbursement capped at $575,000; for auction-comparison purposes the motion values the break-up fee at $1.15 million. The motion proposed an October 9, 2026 bid deadline at 12:00 p.m., with auction overbids in minimum $1 million increments.
Teva, which closed a deal in June to acquire neuroscience biotech Emalex Biosciences for up to $900 million, framed the BioXcel transaction as part of a broader growth push. Teva executive vice president of business development Evan Lippman described the transaction as strengthening Teva's neuroscience portfolio while preserving its risk-and-value discipline. The FDA's target action date for the pending sNDA is November 14, 2026.
Key Timeline
Date
Event
April 2022
BioXcel executes the Credit Agreement and RIFA (up to $260 million) and receives FDA approval for IGALMI
June 29, 2023
TRANQUILITY trial misconduct disclosed; stock falls about 64% in one day
August 2023
Board approves the Clinical Reprioritization
December 2023
RIFA terminated; $30 million balance converted to term loans
Teva's stalking-horse bid consists of $57.5 million in cash at closing plus up to $67.5 million in contingent milestone payments tied to FDA approval timing and future sales, with the transaction subject to higher or better offers at auction.
When is BioXcel's bid deadline?
Competing bids are due October 9, 2026 at 12:00 p.m., with any resulting auction and sale hearing to follow under the proposed bidding procedures, which remain subject to court approval.
Will IGALMI remain available to patients during the bankruptcy?
The company says IGALMI remains commercially available and that it intends to continue supplying the product and supporting patients, prescribers, and trade partners throughout the chapter 11 process.
$0.6 million in revenue in 2025 /documents/57488daf-e84e-4a6e-ad9b-264d9c92b2e2/
more than 40 potential acquirers /documents/7728bc32-8a0b-4c97-9342-a34ddfee6c13/
fallen about 55% during 2026 https://kfgo.com/2026/08/27/biopharma-firm-bioxcel-therapeutics-files-for-bankruptcy-in-us/
up to $19 million in new-money debtor-in-possession financing https://www.biospace.com/business/bioxcel-files-for-bankruptcy-will-sell-assets-to-teva-for-up-to-125m
Cooley LLP and Young Conaway Stargatt & Taylor, LLP https://www.finanznachrichten.de/nachrichten-2026-08/69436249-bioxcel-therapeutics-enters-into-asset-sale-agreement-with-teva-pharmaceuticals-399.htm
Stretto, Inc. is serving as the claims and noticing agent https://markets.businessinsider.com/news/stocks/bioxcel-therapeutics-enters-into-asset-sale-agreement-with-teva-pharmaceuticals-1036502520
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.
The August 28, 2026 agreement provides four alternative development milestone payments. Only one is payable, and closing must occur. Amounts are before permitted deductions. Closing cash and commercial milestone payments are excluded.
Sources and methodology
Evidence through 2026-08-28. One alternative development milestone payment under the filed stalking-horse APA; no probability weighting.
Included: Development milestone amounts in APA section 2.3.2(a).; FDA approval windows are inclusive as labeled..
Excluded: The $57.5 million upfront closing payment.; Commercial milestone payments.; Permitted intellectual-property payment deductions.; Assumed liabilities..