aibioMustang Bio sells Worcester equipment to AbbVie for $1.0 million and exits facility lease
Tickers MBIO
Mustang Bio received the $1.0 million purchase price from escrow on February 25, 2025. It expects about $2.0 million in cash savings on the lease over the next 24 months and has moved its headquarters to Waltham.
Key facts
- Company
- Mustang Bio, Inc. (NASDAQ: MBIO)
- News type
- Mergers
- Primary source
- MUSTANG BIO, INC. Form 8-K filed February 27, 2025 (SEC EDGAR)
Mustang Bio, Inc. (Nasdaq: MBIO) sold certain furniture, fixtures and equipment at its Worcester, Massachusetts manufacturing site to AbbVie Bioresearch Center Inc. for $1.0 million and exited the lease on the building. The company reported the completed asset sale in a Form 8-K filed February 27, 2025. It expects the lease termination to save about $2.0 million in cash expenses over the next 24 months.
What the filing says
Under Item 2.01, the filing says Mustang entered into a Bill of Sale and Surrender Agreement with AbbVie as of February 10, 2025, effective as of January 31, 2025. Mustang was the tenant of the premises at 377 Plantation Street, Worcester, under a lease dated October 27, 2017 with the landlord, WCS - 377 Plantation Street, Inc., a Massachusetts nonprofit corporation.
AbbVie agreed to buy certain furniture, fixtures and equipment in the premises, and other items listed in the agreement, for a purchase price of $1.0 million. AbbVie also agreed to lease the premises from the landlord after Mustang's lease ends, under a First Amendment to Lease Agreement dated February 7, 2025.
How the sale closed
The transaction closed on February 21, 2025. At that point AbbVie issued an Acceptance Notice stating that a sufficient percentage of the listed equipment items were present in the premises and working for their intended purpose without repair or replacement. Mustang had also signed an Escrow Agreement dated February 10, 2025 with Bowditch & Dewey, LLP, as escrow agent. On February 25, 2025, after the Acceptance Notice, the escrow agent released the purchase price to Mustang.
The filing says there is no material relationship, other than this transaction, between AbbVie and Mustang, its affiliates, or any director or officer of Mustang or their associates.
The lease amendment
The amendment, filed as Exhibit 10.1, concerns approximately 27,043 rentable square feet on the first floor of the building. The base term of the lease was scheduled to expire on October 31, 2026. The amendment ends it earlier, on the later of the transfer date defined in the Bill of Sale and Surrender Agreement or the date Mustang surrenders the premises in the condition the lease requires. Mustang also waives its right to exercise the extension options in the lease. After the early termination date, it no longer owes basic rent, additional rent or operating expenses, other than amounts already due.
Mustang must hand the premises back in "AS-IS, WHERE-IS" condition. It does not have to remove certain listed items, and it does not have to remove the work it performed when it first occupied the space. The landlord approved Mustang's surrender plan. If Mustang meets its obligations, the landlord returns the security deposit within thirty days after the early termination date, less any amounts drawn under the lease. If Mustang fails to surrender the premises on time, it would be a tenant at sufferance, liable for holdover charges, and in default.
What the company says
In a press release attached as Exhibit 99.1, Mustang describes the move as the exit of the lease for its manufacturing facility and a concurrent sale of fixed assets. The company says it has relocated its corporate headquarters to 95 Sawyer Road, Waltham, Massachusetts. It says it expects to keep relying on its academic partners and future contract manufacturing relationships to support clinical trials.
Mustang also says it remains focused on its existing portfolio. It anticipates supporting and initiating a novel clinical trial of MB-109 in the second half of 2025. MB-109 combines MB-108, an HSV-1 oncolytic virus, with MB-101, an IL13Rα2-targeted CAR-T cell therapy, for recurrent glioblastoma and high-grade astrocytomas. The press release also lists "our need for substantial additional funds in the immediate future" among the risks facing the company.
About the company
Mustang describes itself as a clinical-stage biopharmaceutical company focused on cell therapies for difficult-to-treat cancers. It was founded by Fortress Biotech, Inc. President, Chief Executive Officer and Interim Chief Financial Officer Manuel Litchman, M.D. signed the 8-K. Michael S. Weiss signed the annual report filed March 11, 2024 as Chairman of the Board of Directors.