Hospira to fund Javelin with $2 million loan, pending outcome of merger deal; signs deal with Durect

Javelin Pharmaceuticals, which last week initiated legal action to enforce a merger and loan agreement with fellow USA-based Hospira (The Pharma Letter June 4), yesterday received notice from Hospira that it will fund a $2 million loan to Javelin on June 10, 2010, under the existing loan agreement between the firms.

Last Friday, Javelin received notice from the staff of the NYSE Amex saying that it is not in compliance with Section 1003(a)(iv) of Part 10 of the NYSE Amex LLC Company Guide. Specifically, after reviewing Javelin's Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, the Exchange staff indicated that Javelin has sustained losses which are so substantial in relation to its overall operation or its existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether Javelin will be able to continue operations and/or meet its obligations as they mature. To maintain its listing, Javelin must submit a plan to the Exchange by June 11, advising how it intends to regain compliance by August 26, 2010.

Javelin was also informed on June 4, that the Delaware Court of Chancery has granted the company's motion to expedite proceedings, and a trial date of July 26 has been set for the law suit filed by Javelin against Hospira and its wholly owned subsidiary, Discus Acquisition, seeking to compel Hospira and Discus to complete the agreed $141 million merger pursuant to the definitive merger agreement among Javelin, Hospira and Discus dated April 17, 2010 (TPLs passim).