SAN DIEGO, July 7 /PRNewswire-FirstCall/ -- Favrille, Inc. (Nasdaq: FVRL) today announced that it has come to an agreement with its secured creditors, General Electric Capital Corporation and Oxford Financial Corporation (Lenders). The agreement follows Favrille's recent announcement that the Lenders had received approximately $8.8 million as repayment of the outstanding principal, accrued interest and certain costs. Acceleration of the loan was triggered when the Company's cash fell below the $14.5 million minimum cash covenant on May 30, 2008. Under terms of the agreement, the Company reimbursed the Lenders an additional $47,000 of transaction costs. The Lenders have been paid in full and, therefore, have agreed to release the general lien on the Company's assets.
Following the recent announcement that the Phase 3 registration trial for its lead product, Specifid(TM), failed to demonstrate activity, Favrille announced it would cease all activities related to Specifid and other programs requiring production of patient-specific therapies including the T-cell and autoimmune disease programs. The Company laid off 132 of its 144 employees, including six of its eight executive officers, effective June 6, 2008. In addition, the Company plans to sell all unneeded fixed assets in the near future.
Favrille is currently in discussions with its landlord regarding the terms of the existing lease agreement in light of the fact that the Company does not require, nor can it meet the obligations for, the GMP manufacturing facility designed for the manufacture of Specifid. The Company intends to maximize the value of its other assets, including the panel of humanized anti-CD20 antibodies acquired from Diversa (now Verenium) in 2007.
"We have received a number of inquiries regarding the manufacturing
|SOURCE Favrille, Inc.|
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