Eiger BioPharmaceuticals: Rare Disease Biotech Liquidation Yields Equity Payout

Eiger BioPharmaceuticals, Inc., a Palo Alto-based commercial-stage biopharmaceutical company focused on rare diseases, filed chapter 11 on April 1, 2024 in the U.S. Bankruptcy Court for the Northern District of Texas. The filing listed about $38.8 million of assets and $53.1 million of liabilities and followed clinical and regulatory setbacks that narrowed the company's financing options. The chapter 11 cases centered on court-supervised sales of drug assets, including Zokinvy and avexitide, rather than a standalone reorganization. Eiger's stock traded on Nasdaq under the EIGR ticker, and the plan later canceled the company's common stock.

Competitive bidding for Zokinvy generated a net $45.2 million purchase price after 35 rounds of bidding, and Amylyx later acquired avexitide for about $35.1 million. The Fifth Amended Joint Plan of Liquidation was confirmed on September 5, 2024, and the plan became effective on September 30, 2024. Public reporting and counsel's summary said secured creditors were paid in full, unsecured creditors were paid in full with interest, and equity holders received distributions.

Debtor(s)	Eiger BioPharmaceuticals, Inc. (and affiliated debtors)
Court	U.S. Bankruptcy Court, Northern District of Texas (Dallas Division)
Case Number	24-80040
Judge	Hon. Stacey G. C. Jernigan
Petition Date	April 1, 2024
Confirmation Date	September 5, 2024
Effective Date	September 30, 2024
Assets / Liabilities	$38.8 million assets / $53.1 million liabilities
Secured Debt (Innovatus)	~$41.685 million outstanding
Zokinvy Sale	Net $45.2 million to Sentynl
Avexitide Sale	$35.1 million to Amylyx

Restructuring Overview

Eiger entered chapter 11 to run a structured sale process for its drug portfolio while preserving patient access and funding operations through closing. The voluntary petition and First Day Declaration described the cases as a liquidation rather than a reorganization. Cash was tight, and Innovatus held first-priority liens on substantially all assets. The Final Cash Collateral Order granted adequate protection through replacement liens and superpriority claims and imposed a budget with variance testing.

Asset sales then moved in rapid succession. The court approved the Zokinvy transaction in late April 2024 through a Zokinvy Sale Order authorizing a transfer free and clear of liens. The avexitide sale followed under a June 27, 2024 Avexitide Sale Order, and the court later entered a revised order on August 21, 2024 covering the lonafarnib and peginterferon lambda assets.

Plan confirmation followed in early September 2024. The Confirmation Order approved an amended disclosure statement and confirmed the Fifth Amended Joint Plan of Liquidation. The plan later became effective on September 30, 2024. Public reporting said secured creditors were paid in full, unsecured creditors were paid in full with interest, and equity holders received distributions.

Case trajectory and sale strategy. Early filings said patient access to Zokinvy would continue during the sale process. Cash collateral funded operations while the debtors marketed Zokinvy, avexitide, and the remaining virology assets through separate transactions. The major sale orders were entered before confirmation.

Sale sequencing and creditor leverage. The sale orders addressed lien releases and assumption and assignment mechanics, and the cash proceeds funded the later liquidation plan. Innovatus remained the principal secured lender throughout the case.

Company Overview and Product Portfolio

Eiger was a commercial-stage biopharmaceutical company focused on rare diseases. The company was headquartered in Palo Alto, California and had a portfolio of approved and development-stage assets. In the First Day Declaration, the debtors also highlighted tax attributes, including net operating losses and research credits.

The most commercially significant asset was Zokinvy (lonafarnib). Zokinvy received FDA approval in November 2020 as the first and only treatment approved for Hutchinson-Gilford progeria syndrome, with U.S. commercial availability in January 2021. It later gained approvals in Europe, Great Britain, and Japan. The condition affects about 400 children worldwide. Industry reporting said Zokinvy could reduce mortality risk 72% and extend average life by 4.3 years.

Avexitide was Eiger's other key asset. The program is a first-in-class GLP-1 receptor antagonist with Breakthrough Therapy Designation for post-bariatric hypoglycemia and was also studied in congenital hyperinsulinism. The asset had been evaluated in five clinical trials, and Amylyx said it planned to complete recruitment for a pivotal study within months of the sale.

The broader portfolio included lonafarnib for hepatitis delta virus and peginterferon lambda for viral indications, which were development-stage assets. Eiger had previously licensed lonafarnib from Merck. The case later produced separate sale orders for Zokinvy, avexitide, and the remaining virology assets.

Zokinvy was the anchor of the sale process. Progeria has an average life expectancy of about 14.5 years, and Zokinvy was the only approved treatment identified in the cited materials. The asset also depended on a license from Merck, which had to be transferred to a buyer.

Events Leading to the Filing

Eiger's bankruptcy followed a series of clinical and regulatory setbacks. In September 2022, the FDA rejected an emergency use authorization request for peginterferon lambda as a COVID-19 treatment.

In September 2023, the Phase III LIMT-2 trial of peginterferon lambda for chronic hepatitis delta was discontinued after safety concerns. The trial enrolled 158 patients across 48 sites in 12 countries, and four patients experienced hepatobiliary events with liver decompensation. Shares fell 36 percent in after-hours trading after the announcement.

Eiger implemented a 25 percent workforce reduction in June 2023, and reports said the board explored equity financing before filing. With liabilities exceeding assets and secured debt owed to Innovatus, the company entered a court-supervised sale process.

The company had explored equity financing before filing, and its shares fell as much as 51 percent after bankruptcy reports. Bloomberg reported on the filing and the Dallas venue.

Capital Structure and Liquidity

Eiger's prepetition capital structure was anchored by an Innovatus term loan facility. In June 2022 the company entered into a term loan agreement of up to $75 million, including a $40 million initial draw and additional tranches tied to regulatory and clinical milestones. The facility carried a floating rate and was secured by a first priority interest in substantially all assets, including intellectual property. The same transaction included a $5 million common stock purchase, a structure that underscored Innovatus' role as both lender and strategic financier during Eiger's late stage development push.

Interest and amortization profile. The facility had a 60-month interest-only period and a total term of 63 months, and the agreement permitted a portion of interest to be paid in kind in the early years. The First Day Declaration reported an effective rate of 13.84 percent for the year ending December 2023.

By the petition date, the debtors reported approximately $41.685 million outstanding under the Innovatus facility. The lender's liens covered the assets that would be sold, and the chapter 11 cases required cash collateral relief to fund operations and the sale process.

The Final Cash Collateral Order authorized the debtors to use cash collateral subject to a budget and a variance threshold. The order provided adequate protection through replacement liens on postpetition collateral and superpriority administrative claims.

Asset Sales and Auction Outcomes

The Zokinvy sale was the anchor transaction. Before filing, Eiger announced a stalking horse deal with Sentynl Therapeutics priced at up to $26 million. The auction reportedly ran through 35 rounds before Sentynl emerged with a higher bid. Sentynl's press release described a base price of $46.1 million and a $0.9 million termination fee credit, resulting in a net $45.2 million purchase price. The court approved the transaction through the Zokinvy Sale Order, and the sale closed on May 3, 2024, with Sentynl, a subsidiary of Zydus, acquiring worldwide rights.

The avexitide transaction followed a similar court supervised path. The debtors obtained authority to sell the program under a June 27, 2024 sale order, and Amylyx announced a July 9, 2024 closing. The price was $35.1 million plus cure costs and assumed liabilities, and Amylyx highlighted the asset's Breakthrough Therapy Designation and its plan to advance a Phase III program. Industry reporting framed the acquisition as a pivot into the GLP-1 space with topline data targeted for 2026 and potential commercialization in 2027.

Operational continuity and patient services. At the outset of the case, the company stated that patient access to Zokinvy would continue without interruption while the auction ran. Sentynl's acquisition announcement described the transaction as a global rights transfer and identified Sentynl as a subsidiary of Zydus.

Eiger also pursued a sale of lonafarnib and peginterferon lambda assets. The court entered a revised sale order on August 21, 2024 authorizing the transaction, but the reviewed excerpts did not disclose the buyer or consideration.

The sales were approved through separate orders covering Zokinvy, avexitide, and the remaining virology assets.

Plan of Liquidation and Distributions

The joint plan of liquidation established the framework for winding down Eiger and distributing proceeds from the asset sales. The plan organized claims into multiple classes, including secured claims, priority claims, general unsecured claims, intercompany claims, and equity interests.

The Confirmation Order approved an amended Disclosure Statement and confirmed the Fifth Amended Joint Plan of Liquidation. Public summaries of the confirmation outcome said secured creditors were paid in full, unsecured creditors received full payment with interest, and equity holders received distributions. The same summary said the plan included opt-out third-party releases and releases for officers and directors.

Post-effective reporting changes. The effective date announcement stated that the company would file a Form 15 and cease periodic SEC reporting, including the cessation of Forms 10-K, 10-Q, and 8-K.

The plan became effective on September 30, 2024, at which point the company reported that all shares of common stock were cancelled and it would stop filing periodic SEC reports.

Key Parties and Professionals

The company retained Sidley Austin as counsel, Alvarez and Marsal as financial advisor, and SSG Capital Advisors as investment banker, as identified in the company's chapter 11 announcement. The court authorized the retention of Kurtzman Carson Consultants LLC as claims, noticing, and solicitation agent.

The secured capital structure was dominated by Innovatus Life Sciences Lending Fund I, LP, which served as collateral agent for the term loan facility and set the cash collateral framework.

The claims agent maintained the official claims register and handled noticing and solicitation during the sale and plan process. The company identified Kurtzman Carson Consultants LLC in that role at the start of the case.

Frequently Asked Questions

What did Eiger BioPharmaceuticals do?

Eiger was a commercial-stage biotech focused on rare diseases, with Zokinvy as its flagship product and additional pipeline assets such as avexitide and lonafarnib. The company is described as a rare disease specialist in its chapter 11 announcement, and it traded publicly on Nasdaq under the EIGR ticker.

Why did Eiger file for chapter 11?

The FDA rejected emergency use authorization for peginterferon lambda in September 2022, and the Phase III LIMT-2 study was discontinued for safety reasons in September 2023. Those events, combined with a balance sheet showing liabilities above assets, preceded the court-supervised sale process.

What was Zokinvy and why was it valuable?

Zokinvy (lonafarnib) is the first and only approved treatment for Hutchinson-Gilford progeria syndrome. It received FDA approval in 2020 and later approvals in Europe, Great Britain, and Japan. The drug addressed a patient population of roughly 400 children worldwide.

Who bought Zokinvy and for how much?

Sentynl Therapeutics, a subsidiary of Zydus, acquired Zokinvy after an auction that resulted in a base price of $46.1 million and a $0.9 million termination fee credit, for a net $45.2 million. The court approved the transfer under the Zokinvy sale order, and the sale closed on May 3, 2024.

What is avexitide and who acquired it?

Avexitide is a GLP-1 receptor antagonist with Breakthrough Therapy Designation for post-bariatric hypoglycemia and studies in congenital hyperinsulinism. Amylyx acquired the program for about $35.1 million under a June 27, 2024 sale order, and the buyer described plans to advance a Phase III program with data expected in 2026.

What happened to the peginterferon lambda program?

The Phase III LIMT-2 trial in chronic hepatitis delta was discontinued in September 2023 after a safety review found hepatobiliary events with liver decompensation in four patients. The discontinuation removed a key late-stage virology program from the portfolio.

What was the Innovatus term loan and how much was outstanding?

Eiger entered a term loan facility of up to $75 million in June 2022. By the petition date, court filings showed about $41.685 million outstanding, with Innovatus holding first priority liens on substantially all assets.

Did creditors and shareholders recover anything?

Yes. The confirmation summary reported that secured creditors were paid in full, unsecured creditors received full payment with interest, and equity holders received distributions.

When did the plan become effective and what happened to the stock?

The plan became effective on September 30, 2024. On the effective date, all shares of common stock were cancelled and the company indicated it would stop filing periodic SEC reports, effectively ending its public reporting status.

Who is the claims agent for Eiger BioPharmaceuticals?

Kurtzman Carson Consultants LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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