Eiger BioPharmaceuticals: $45.2M Sale and Rare Equity Recovery

Eiger BioPharmaceuticals produced an outcome that is rare in chapter 11: a liquidation in which every class of creditors was paid in full and equity holders still received cash. The Palo Alto rare-disease drug developer sold its entire portfolio — anchored by the progeria treatment Zokinvy — through four court-supervised sales that generated roughly $87 million in gross proceeds, enough to satisfy secured and unsecured claims with interest and to return distributions to shareholders whose common stock was nonetheless cancelled. Eiger filed chapter 11 on April 1, 2024 in the U.S. Bankruptcy Court for the Northern District of Texas (case no. 24-80040) before Judge Stacey G. C. Jernigan, listing about $38.8 million of assets and $53.1 million of liabilities.

The case was structured from day one as a sale process rather than a reorganization, but it did not end at confirmation. A protracted post-effective fight between the two principal asset buyers — Sentynl Therapeutics, which acquired Zokinvy, and Eiger InnoTherapeutics, which acquired the virology assets — over shared manufacturing infrastructure generated a roughly $45.2 million administrative expense claim and litigation that ran into 2026. The Fifth Amended Joint Plan of Liquidation was confirmed on September 5, 2024 and became effective on September 30, 2024.

Debtor(s)	Eiger BioPharmaceuticals, Inc. (5 jointly administered entities)
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
Aggregate Sale Proceeds	~$87.3 million gross across four asset sales
Claims Agent	Kurtzman Carson Consultants LLC

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Sale-Driven Liquidation and Case Path

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 of David Apelian described the cases as a liquidation rather than a reorganization, and the debtors filed a Bidding Procedures Motion the same day. Cash was tight, and Innovatus Life Sciences Lending Fund I, LP held first-priority liens on substantially all assets, so the debtors needed cash collateral relief to operate. The court entered an interim cash collateral order on April 5, 2024 and a final cash collateral order on April 24, 2024, granting adequate protection through replacement liens and superpriority claims and imposing a budget with a 120% variance threshold for any rolling four-week period.

Asset sales then moved in rapid succession. The court approved the Zokinvy transaction on April 24, 2024 in a transfer free and clear of liens, approved the avexitide sale under a June 27, 2024 Avexitide Sale Order, and entered a revised order on August 21, 2024 covering the remaining lonafarnib and peginterferon lambda assets. All four sales closed before or around plan confirmation, so by the time creditors voted, the estate had largely been converted to cash.

Date	Event
April 1, 2024	Chapter 11 petition, First Day Declaration, and bidding procedures motion filed
April 5, 2024	Interim cash collateral order and NOL trading procedures order entered
April 24, 2024	Final cash collateral order and Zokinvy sale order entered
May 3, 2024	Sentynl acquisition of Zokinvy closes
June 14, 2024	Official Committee of Unsecured Creditors formed
June 26, 2024	Official Equity Security Holders' Committee formed
June 27, 2024	Avexitide sale order entered
July 10, 2024	Amylyx acquisition of avexitide announced
July 15, 2024	Joint Plan of Liquidation and Disclosure Statement filed
August 21, 2024	Revised lonafarnib/lambda sale order entered
September 5, 2024	Confirmation order entered
September 30, 2024	Plan effective date; common stock cancelled
March 24, 2026	Claims objection bar date extended to July 20, 2026

Rare-Disease Portfolio and Asset Value

Eiger was a commercial-stage biopharmaceutical company focused on rare diseases, headquartered in Palo Alto, California with roughly nine full-time employees at the petition date. Its value to the estate was concentrated in a small number of orphan-drug programs, each carrying FDA Breakthrough Therapy designation, and in substantial tax attributes. The first day declaration reported approximately $322.5 million in federal net operating losses and $47.1 million in state NOLs as of December 31, 2023, along with research and orphan-drug tax credits — attributes significant enough that the court entered an NOL trading procedures order on April 5, 2024 to protect them.

The most commercially significant asset was Zokinvy (lonafarnib). Zokinvy received FDA approval in November 2020 as the first and only treatment for Hutchinson-Gilford progeria syndrome, with U.S. commercial availability in January 2021, and it later gained approvals in Europe, Great Britain, and Japan. Progeria affects about 400 children worldwide and carries an average life expectancy of about 14.5 years; Zokinvy was the only approved therapy and depended on a license from Merck that had to be transferred to any buyer. That dependence later became a contested issue when the estate rejected the Merck license.

Avexitide, a first-in-class GLP-1 receptor antagonist with Breakthrough Therapy Designation for post-bariatric hypoglycemia and studies in congenital hyperinsulinism, was the second key program and had been evaluated in five clinical trials. The remaining portfolio comprised development-stage virology assets — lonafarnib for hepatitis delta virus and peginterferon lambda — whose value had been impaired by clinical setbacks before the filing.

Clinical Setbacks and Innovatus Defaults

Eiger's path to bankruptcy ran through a series of clinical and regulatory setbacks. In September 2022, the FDA rejected an emergency use authorization for peginterferon lambda as a COVID-19 treatment, removing a near-term regulatory path. In September 2023, the Phase III LIMT-2 trial of peginterferon lambda for chronic hepatitis delta was discontinued after safety concerns. The trial had 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 on the news.

The company implemented a 25 percent workforce reduction in June 2023 and explored equity financing before filing, but its shares fell as much as 51 percent after bankruptcy reports. The immediate trigger was on the secured-debt side: the first day declaration attributed the filing to defaults declared by Innovatus under the term loan facility and the resulting threat of enforcement against the company's assets. Eiger stated two purposes for the cases — ensuring continuity of supply of its life-saving drugs to patients, including children, and instituting a sale process to maximize value — and entered chapter 11 with liabilities exceeding assets and a lender prepared to foreclose on its collateral.

Innovatus Term Loan and Cash Collateral

Eiger's prepetition capital structure was anchored by a single Innovatus term loan facility. In June 2022 the company entered into a term loan agreement of up to $75 million, with an initial draw of approximately $40 million and additional tranches of up to $35 million tied to regulatory and clinical milestones. The facility was secured by a first-priority interest in substantially all assets, including intellectual property, and the same transaction included a $5 million common stock purchase, making Innovatus both lender and equity investor. The loan and security agreement was dated June 1, 2022 and carried an August 31, 2027 maturity.

The first day declaration reported the facility's interest rate as the greater of Prime or 3.5 percent, plus 3.75 percent, producing an effective rate of 13.84 percent for the year ending December 31, 2023, with a portion of interest payable in kind in the early years. By the petition date the debtors reported $41,685,030.30 outstanding under the Term A loan. That balance fell sharply once the sales closed: the court later estimated the Innovatus claim at $15,738,961.47 solely for purposes of funding the Prepetition Term Loan Claims Escrow Account and rendering Innovatus unimpaired, reflecting substantial paydown from sale proceeds during the case.

The Final Cash Collateral Order authorized the debtors to use cash collateral subject to the budget and variance threshold, and provided Innovatus adequate protection through first-priority replacement liens on postpetition collateral and superpriority administrative claims, subject to a carve-out. Cash collateral funded operations and the marketing process while the debtors ran the four asset sales.

Innovatus was also active on the venue front. The U.S. Trustee filed an emergency motion in April 2024 arguing that Eiger — a Palo Alto company with nine employees — lacked sufficient ties to Texas to justify the Northern District filing. The bankruptcy court rejected that challenge on May 7, 2024, ruling Eiger could remain in Dallas. Innovatus then appealed the venue ruling to the district court in late May, but the case proceeded to confirmation in Texas without a transfer. During plan solicitation, the court separately rejected Innovatus's bid for a $13 million attorney fee reserve within the plan, siding with the debtors on the scope of Innovatus's future claims.

Four Asset Sales and Auction Outcomes

The case proceeded as a multi-asset liquidation with four sale transactions, but only one drew a competitive auction. The Zokinvy sale was the anchor. Eiger entered chapter 11 with a stalking-horse agreement with Sentynl Therapeutics, and the auction reportedly ran through 35 rounds of bidding before Sentynl prevailed; Sentynl's announcement described a base price of $46.1 million, reduced by a $0.9 million termination fee credit to a net $45.2 million. The court approved the transfer of worldwide rights through the Zokinvy Sale Order, and the sale closed on May 3, 2024 with Sentynl, a subsidiary of Zydus, as buyer. Eiger stated that patient access to Zokinvy would continue without interruption during the process.

Avexitide produced the only true auction. Spruce Bioscience, Inc. served as stalking horse at $10 million, and competitive bidding more than tripled that figure: Amylyx Pharmaceuticals won the auction with a $35.1 million bid plus determined cure costs and assumed liabilities. The court entered the avexitide sale order on June 27, 2024, and Amylyx announced a July 9, 2024 closing, framing the acquisition as a pivot into the GLP-1 space with topline data targeted for 2026.

The remaining virology assets drew no competitive bidding. After the July 19, 2024 bid deadline, Eiger InnoTherapeutics, Inc. — later renamed EIT Pharma, Inc. — was the sole qualified bidder, and the auction was cancelled. The buyer agreed to acquire the lonafarnib (hepatitis delta) program for a $5.2 million base price, plus contract-assumption adjustments of up to $2.38 million, and the peginterferon lambda assets for $1.0 million, plus up to $269,000 in cure costs. The court entered a revised sale order on August 21, 2024. Together the four sales generated approximately $87.3 million in gross proceeds.

Asset	Buyer	Purchase price	Process
Zokinvy (lonafarnib, progeria)	Sentynl Therapeutics (Zydus subsidiary)	Net $45.2 million	Stalking horse; prevailed after 35 bidding rounds
Avexitide	Amylyx Pharmaceuticals	$35.1 million + cure costs	Competitive auction; Spruce Bioscience stalking horse at $10M
Lonafarnib (HDV)	Eiger InnoTherapeutics (now EIT Pharma)	$5.2 million + up to $2.38M	Sole qualified bidder; auction cancelled
Peginterferon lambda	Eiger InnoTherapeutics (now EIT Pharma)	$1.0 million + up to $269K cure	Sole qualified bidder; auction cancelled

Liquidating Plan and Class 4 Upgrade

The Joint Plan of Liquidation established the framework for winding down Eiger and distributing the sale proceeds, organizing claims into six classes. The most consequential development for creditors came during solicitation. As initially solicited, Class 4 general unsecured claims were impaired with no distribution; the Fifth Amended Plan amended that treatment to provide post-petition interest through the distribution date, rendering Class 4 unimpaired and paid in full. The Confirmation Order approved an amended Disclosure Statement and confirmed the plan on September 5, 2024.

Class	Description	Treatment	Recovery
1	Other Secured Claims	Unimpaired; paid in full	100%
2	Other Priority Claims	Unimpaired; paid in full in cash	100%
3	Innovatus Prepetition Term Loan Claims	Unimpaired; pro rata share of Term Loan Escrow (claim estimated at $15.7M)	100%
4	General Unsecured Claims	Unimpaired as amended; paid in full plus post-petition interest (0% as first solicited)	100%
5	Intercompany Claims	Cancelled and discharged; distributions waived	0%
6	Existing Equity Interests	Cancelled and discharged	0% (with later trust distributions)

The effective date announcement confirmed the plan went effective on September 30, 2024, at which point all common stock was cancelled and the company stated it would file a Form 15 and cease periodic SEC reporting, including Forms 10-K, 10-Q, and 8-K. Public summaries of the outcome reported that secured creditors were paid in full, unsecured creditors received full payment with interest, and equity holders received distributions — an unusual recovery profile produced by sale proceeds that exceeded the estate's liabilities. Although the equity class was technically cancelled at par, the liquidating trust later distributed cash to former holders, as the Notice of Effective Date and subsequent reports reflect.

Confirmation Objections and Post-Effective Litigation

The plan drew two confirmation objections, both overruled, and several disputes that outlasted the effective date. U.S. Trustee objection. The U.S. Trustee objected on four grounds: that the plan's non-discharge injunction effectively functioned as an impermissible discharge for a liquidating debtor, that the exculpation provision exceeded Fifth Circuit authority, that the opt-out third-party releases were nonconsensual and unauthorized, and that the injunction enforcing the releases was overbroad. The Confirmation Order overruled all outstanding objections.

Equity Committee and D&O tail insurance. Because Eiger was publicly traded, the case produced both an Official Committee of Unsecured Creditors and an Official Equity Security Holders' Committee. The Equity Committee objected to the director-and-officer releases, arguing there was no justification for releases in a liquidation, that no consideration was being paid by the released parties, and that the debtors had spent $2.7 million in the two weeks before the petition to purchase approximately $20 million in D&O tail coverage — an asset the broad releases would have extinguished. The committee's own investigation of potential D&O claims was ongoing. The court overruled the objection and confirmed the plan with the releases.

Sentynl administrative claim and manufacturing disputes. The largest post-effective dispute was between the two buyers over shared manufacturing infrastructure. Sentynl filed a motion to enforce the Zokinvy Sale Order and for contempt, alleging that EIT Pharma blocked its access to Lonza Bend and Corden Pharma Colorado supply and data; EIT responded with its own emergency motion seeking confirmation that its lonafarnib purchase had transferred the Corden inventory and contracts. The parties entered an interim stipulation on May 2, 2025 giving Sentynl interim manufacturing access, and resolved all contested manufacturing matters by stipulation in July 2025. Separately, Sentynl filed a $45.2 million administrative expense claim — effectively the full Zokinvy purchase price — alleging post-petition breaches. The Liquidating Trustee objected that a December 2024 settlement with EIT had mooted the claim and moved for summary judgment, but the court denied summary judgment on May 28, 2025, allowing the contest to proceed. The administrative claim ultimately settled on undisclosed terms.

Merck and Sciensus claims. The Liquidating Trustee objected to two Merck Sharp & Dohme claims — an unliquidated indemnification claim and a rejection-damages claim — arising from the 2010 lonafarnib license, arguing that a September 2024 Side Letter among Merck, Eiger, and Eiger InnoTherapeutics worked a novation transferring future obligations to the buyer. That objection settled in May 2025. The Trustee also objected to a Sciensus International claim for roughly $93,882 in attorney fees, which likewise settled.

Professionals and Fee Awards

The debtors retained Sidley Austin as counsel, Alvarez & Marsal as financial advisor with Douglas Staut serving as CRO, and SSG Advisors as investment banker, as identified in the chapter 11 announcement, with Kurtzman Carson Consultants as claims and noticing agent. The two creditor committees added a second layer of professionals: Meland Budwick represented the UCC, while Porzio, Bromberg & Newman and McKool Smith served as co-counsel and Dundon Advisers as financial advisor to the Equity Committee. Final fee applications, all approved in October 2024, totaled roughly $14.4 million.

Professional	Role	Fees approved
Sidley Austin LLP	Debtors' counsel	$7,698,866
Alvarez & Marsal / Douglas Staut (CRO)	Financial advisor / CRO	$2,740,552
SSG Advisors, LLC	Investment banker	$2,727,388
Porzio, Bromberg & Newman, P.C.	Equity Committee co-counsel	$960,891
McKool Smith, PC	Equity Committee co-counsel	$442,516
Meland Budwick, P.A.	UCC counsel	$262,049
Deloitte Tax LLP	Tax services	$142,494
Neligan LLP	Conflicts counsel	$139,505
Dundon Advisers LLC	Equity Committee financial advisor	$80,486

Liquidating Trust and Claims Reconciliation

The estate continued to wind down well into 2026 under a liquidating trust. Broadbent Advisors LLC initially served as Plan Administrator following the effective date, but resigned effective September 26, 2025, and Dundon Advisers LLC — already serving as Liquidating Trustee — was appointed successor, consolidating both roles. The trust's post-confirmation reports for the lead debtor showed approximately $13.56 million in total disbursements since the effective date as of the first quarter of 2026, including $5.75 million of an anticipated $6.74 million in equity distributions, $3.29 million of $3.76 million in general unsecured distributions, and $0.20 million of $0.28 million in priority distributions. No class distributions were made during the fourth quarter of 2025 or the first quarter of 2026; the quarter-over-quarter increase of roughly $278,000 reflected continued trust administrative spend.

Claims reconciliation extended the case timeline through successive deadline extensions. The Liquidating Trustee's Fourth Motion to Extend the claims objection deadline recorded that the Sentynl administrative claim, the Merck claims, and the Sciensus claim had all settled, and the court extended the bar date to July 20, 2026. The last meaningful contested thread was an avoidance and fraudulent-transfer track against claimant David Cory; rather than file an adversary complaint, the Trustee and Cory entered successive stipulations extending the filing deadline, and a further stipulation in May 2026 pushed it to June 24, 2026, citing a settlement agreement in principle subject to Oversight Committee approval.

Frequently Asked Questions

Why did Eiger BioPharmaceuticals file for chapter 11?

The immediate trigger was a default declared by secured lender Innovatus under the company's term loan, and the resulting threat of enforcement. That followed a string of clinical setbacks, including the FDA's rejection of an emergency use authorization for peginterferon lambda in 2022 and the discontinuation of the Phase III LIMT-2 study in 2023, with liabilities exceeding assets at filing.

Who bought Zokinvy and for how much?

Sentynl Therapeutics, a subsidiary of Zydus, acquired Zokinvy after an auction that produced a base price of $46.1 million and a $0.9 million termination fee credit, for a net $45.2 million. The sale closed on May 3, 2024.

What happened to the other drug assets?

Amylyx Pharmaceuticals acquired avexitide for $35.1 million after outbidding stalking horse Spruce Bioscience, and Eiger InnoTherapeutics (now EIT Pharma) bought the lonafarnib hepatitis delta program for $5.2 million and the peginterferon lambda assets for $1.0 million, both as the sole qualified bidder.

Did creditors and shareholders recover anything?

Yes. Under the confirmed plan, secured creditors were paid in full, general unsecured creditors were paid in full with post-petition interest after Class 4 was upgraded from a zero-recovery treatment during solicitation, and former equity holders received cash distributions from the liquidating trust even though their stock was cancelled.

Why was there both a creditors' committee and an equity committee?

Eiger traded publicly on Nasdaq, and the sale proceeds were large enough to suggest an equity recovery, so the U.S. Trustee appointed an Official Equity Security Holders' Committee alongside the standard unsecured creditors' committee. The equity committee challenged the plan's D&O releases, in part to preserve roughly $20 million in tail insurance the company had bought shortly before filing.

Who is the claims agent for Eiger BioPharmaceuticals?

Kurtzman Carson Consultants LLC serves as the claims and noticing agent. The court extended the claims objection deadline to July 20, 2026, and the liquidating trust continues to reconcile remaining claims.

For related coverage, see ElevenFlo's analyses of other chapter 11 liquidation and asset-sale cases.