Retrotope, Inc.

Client Profile

Retrotope, founded in 2006 and based in Los Altos, California, is a clinical stage biotechnology company developing drugs to combat serious and debilitating neurological and retinal degenerative diseases caused by lipid peroxidation (LPO). With three molecules under development, the Company’s lead product candidates include RT-001, for the treatment of multiple progressive neurological diseases, and RT-011 for the treatment of dry age-related macular degeneration. If successful, Retrotope’s drug candidates would represent the first approved therapies in several of its lead indications.

Situation

After failure to reach end points in clinical trials of RT-001 in late 2021 and early 2022, Retrotope began experiencing liquidity constraints. After shareholders were unable to resolve the terms of funding for the Company to preserve ongoing operations and existing clinical trials, Retrotope filed for protection under Sub-Chapter V of Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on March 21, 2022.

Solution

SSG was retained just prior to filing to advise the Company on strategic alternatives and to conduct an accelerated and comprehensive marketing process to solicit interest from strategic and financial investors. The Company negotiated a DIP Loan and a Stalking Horse Agreement with RTMFP to preserve the business as a going concern and to ensure all existing human clinical trials progressed uninterrupted. After receiving a qualified overbid from a strategic biopharma company, an auction was held with multiple rounds of bidding, including a bid for cash plus future milestone and royalty payments. Ultimately, RTMFP’s all-cash offer was determined by the Debtor to be the highest and best offer for Retrotope’s assets and was selected as the winning bidder. The auction results were contested by objecting shareholders with the support of the competing bidder. The sale to RTMFP was approved by the Bankruptcy Court after a two-day contested bid valuation and plan confirmation trial. SSG’s extensive experience in managing complex processes, with multiple stakeholders, resulted in a going-concern transaction that paid all creditors in full and provided a distribution to equity holders.