Neumedicines Inc. bankruptcy was filed under Chapter 11 in Los Angeles in July, 2020. Neumedicines is an R&D company that develops cancer treatment drugs. Its primary patent is on Interleukin-12 (IL-12) (“Hemamax”), which is designed to boost a patient’s immune system responses during cancer treatments.
Neumedicines asserts in its bankruptcy filings that the Hemamax patent is worth $20 million. It also expects a $500,000 grant from the European Union sometime after January, 2021–even though this $500,000 is apparently already listed in its asset schedule.
After the $20.5 million identified above, Neumedicines assets are listed at only $111,396, against liabilities of 3,917,261. In other words, if the blue-sky patent estimate ($20 million) and the EU grant ($500,000) expected in Q1 2021 are not counted, the company is insolvent. So the most important asset to have valued is, clearly, the Hemamax patent.
On August 5, 2020, Neumedicines filed a motion to use its cash collateral to hire an investment banker to pursue a buyer of the company or its assets. Its proposed 13-week budget will use virtually all the company’s cash on hand.
Clearly, everyone in this case needs and wants the Hemamax patent to come in at a high value. Successful reorganization and investor payouts depend on it. It seems advisable to get right to the valuation issue as soon as possible and avoid using cash for any ancillary activities.