Oscient Pharmaceuticals files for Chapter 11

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Oscient Pharmaceuticals Corp. (OSCI) said Monday it and its wholly owned subsidiary, Guardian II Acquisition Corporation, each filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Massachusetts, seeking relief from its debt.

The companies currently sell two products, Antara capsules for the treatment of high blood cholesterol and high triglycerides in combination with diet, and Factive tablets, an antibiotic used to treat acute bacterial exacerbations of chronic bronchitis and community-acquired pneumonia of mild to moderate severity.

While the companies will continue to operate during the bankruptcy, Oscient has already sold the chronic bronchitis drug Factive to Cornerstone Therapeutics Inc. (CRTX) for $5 million plus the value of Factive inventory at closing and a royalty on Cornerstone's sales of Factive, less certain adjustments. Revenue from Factive was $5.2 million in the fourth quarter, down 12 percent from a year earlier.

Oscient and Guardian are continuing to explore strategic alternatives, including seeking a buyer for the Antara and other assets. Antara revenue increased 10 percent in the fourth quarter from a year earlier.

Oscient added that is believes that there will be no value for the common stockholders in the bankruptcy liquidation process. Some of its creditors, it added, will not be fully satisfied either.

Even before the bankruptcy filing, OSCI shares were to be delisted from the Nasdaq on July 21, according to the company, as it failed to pay listing fees. Also, despite reporting a narrower fourth-quarter loss and an increase in revenue, the company's auditors included a "going concern" paragraph in their audit opinion.

Oscient has cut 280 of its 305 jobs this year as its stock plunged 86 percent to close at 18.1 cents today. It's plummetted about 70 percent in after-hours trading to 5.01 cents at 6:22 p.m.

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