ARROWHEAD PHARMACEUTICALS, INC. (NASDAQ:ARWR) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement. |
On March21, 2017, Arrowhead Pharmaceuticals, Inc., a Delaware
corporation (the Company), entered into a Rights Agreement
(as defined below) to an authorization and declaration by the
Board of Directors of the Company (the Board) of a dividend
distribution of one right (each, a Right and together with
all other such rights distributed or issued to the Rights
Agreement (as defined below), the Rights) for each
outstanding share of common stock, par value $0.001, of the
Company (the Common Stock). The dividend was payable to
holders of record as of the close of business on March22, 2017
(the Record Date) and the dividend distribution was made
on March22, 2017.
The following is a summary description of the Rights. This
summary is intended to provide a general description only and is
subject to the detailed terms and conditions of the Rights
Agreement, dated as of March21, 2017, by and between the Company
and Computershare Trust Company, N.A., as rights agent (the
Rights Agent), a copy of which is attached hereto as
Exhibit 4.1, which is incorporated herein by reference (the
Rights Agreement).
Issuance of Rights
Each holder of Common Stock as of the Record Date will receive a
dividend of one Right per share of Common Stock. One Right will
also be issued together with each share of Common Stock issued by
the Company after the Record Date and prior to the Distribution
Date (as defined below), and in certain circumstances, after the
Distribution Date. New certificates for Common Stock issued after
the Record Date will contain a notation incorporating the Rights
Agreement by reference.
Until the Distribution Date:
| the Rights will not be exercisable; |
|
the Rights will be evidenced by the certificates for Common Stock (or, in the case of book entry shares, by notation in book entry) and not by separate rights certificates; and |
|
the Rights will be transferable by, and only in connection with, the transfer of Common Stock. |
Distribution Date
The Rights are not exercisable until the Distribution Date. As of
and after the Distribution Date, the Rights will separate from
the Common Stock and each Right will become exercisable to
purchase one one-thousandth of a share of Series D Junior
Participating Preferred Stock, par value $0.001 per share, of the
Company (each whole share, a share of Preferred Stock) at
a purchase price of $20 (such purchase price, as may be adjusted,
the Purchase Price). This portion of a share of Preferred
Stock would give the holder thereof approximately the same
dividend, voting and liquidation rights as would one share of
Common Stock, with any variations set forth in the Certificate of
Designation, Preferences, and Rights of Series D Junior
2
Participating Preferred Stock attached hereto as Exhibit 3.1.
Prior to exercise, the Right does not give its holder any
dividend, voting or liquidation rights.
The Distribution Date is the earlier of:
|
Ten (10)Business Days following a public announcement that a person has become an Acquiring Person by acquiring beneficial ownership of 15% or more of the Common Stock then outstanding (or, in the case of a person that had beneficial ownership of 15% or more of the outstanding Common Stock on the date that the Rights Agreement was executed, by obtaining beneficial ownership of any additional shares of Common Stock) other than as a result of repurchases of Common Stock by the Company or certain inadvertent acquisitions; and |
|
Ten (10)business days (or such later date as the Board shall determine prior to the time a person becomes an Acquiring Person) after the commencement of a tender offer or an exchange offer by or on behalf of any person (other than the Company and certain related entities) that, if completed, would result in such person becoming an Acquiring Person. |
Beneficial Ownership
A person will be deemed to beneficially own any Common Stock if
such person or any affiliated or associated persons of such
person:
|
is considered a beneficial owner of the Common Stock under Rule13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended and as in effect on the date of the Rights Agreement; |
|
has the right to acquire the Common Stock, either immediately or in the future, to any agreement, arrangement or understanding (other than a customary underwriting agreement relating to a bona fide public offering of the Common Stock) or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise, except that a person will not be deemed to be a beneficial owner of (a)securities tendered to a tender offer or an exchange offer by or on behalf of such person or any affiliated or associated persons of such person until the tendered securities are accepted for purchase or exchange, (b)securities issuable upon the exercise of a Right before the occurrence of a Triggering Event (as defined below), or (c)securities issuable upon the exercise of a Right after the occurrence of a Triggering Event if the Rights are originally issued Rights or were issued in connection with an adjustment to originally issued Rights; |
|
has the right to vote or dispose of the Common Stock to any agreement, arrangement, or understanding (other than a right to vote arising from the granting of a revocable proxy or consent that is not also then reportable on a Schedule13D); or |
|
has an agreement, arrangement, or understanding with |
3
|
is for the purpose of acquiring, holding, voting, or |
Certain synthetic interests in securities created by derivative
positionswhether or not such interests are considered to be
ownership of the underlying common stock or are reportable on a
Schedule13Dare treated as beneficial ownership of the number of
shares of Common Stock equivalent to the economic exposure
created by the derivative position, to the extent actual shares
of Common Stock are directly or indirectly held by counterparties
to the derivatives contracts. Swaps dealers unassociated with any
control intent or intent to evade the purposes of the Rights
Agreement are excepted from such imputed beneficial ownership.
Issuance of Rights Certificates
As soon as practicable after the Distribution Date, the Company
or the Rights Agent will mail rights certificates to holders of
record of Common Stock as of the close of business on the
Distribution Date (other than an Acquiring Person or any
Associate or Affiliate of an Acquiring Person) and, thereafter,
the separate rights certificates alone will evidence the Rights.
Expiration of Rights
The Rights will expire on the earliest of (a)5:00 p.m., New York
time, on March21, 2018, (b)the time at which the Rights are
redeemed (as described below), and (c)the time at which the
Rights are exchanged in full (as described below) (the earliest
of (a), (b)and (c)being herein referred to as, the Expiration
Date).
Change of Exercise of Rights Following Certain Events
The following described events are referred to as Triggering
Events.
|
Flip-In Event. In the event that a person becomes an Acquiring Person, each holder of a Right will thereafter have the right to receive, upon exercise, Common Stock (or, in certain circumstances, other securities, cash, or other assets of the Company) having a value equal to two times the Purchase Price. Notwithstanding any of the foregoing, following the occurrence of a person becoming an Acquiring Person, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person (or by certain related parties) will be null and void. |
For example, at a purchase price of $20 per Right, following the
occurrence of a person becoming an Acquiring Person, each Right
not owned by the Acquiring Person (or by certain related parties)
would entitle its holder to purchase $40 worth of Common Stock
(or, in certain circumstances, other securities, cash, or other
assets of the Company) for $20. Assuming that the Common Stock
has a per share value of $2 at such time, the holder of each
valid Right would be entitled to purchase 20 shares of Common
Stock (or, in certain circumstances, other securities, cash, or
other assets of the Company) for $20.
4
|
Flip-Over Events. In the event that, at any time after a person has become an Acquiring Person, (i)the Company engages in a merger or other business combination transaction in which the Company is not the continuing or surviving corporation or other entity, (ii)the Company engages in a merger or other business combination transaction in which the Company is the continuing or surviving corporation and the Common Stock of the Company are changed or exchanged, or (iii)50% or more of the Companys assets or earning power is sold or transferred, each holder of a Right (except Rights that have previously been voided as set forth above) shall thereafter have the right to receive, upon exercise, common shares of the acquiring company having a value equal to two times the Purchase Price. |
Redemption
At any time prior to the earlier of (a)the Distribution Date and
(b)the Expiration Date, the Board may direct the Company to
redeem the Rights in whole, but not in part, at a price of $0.01
per Right (payable in cash, Common Stock, or other consideration
deemed appropriate by the Board). Immediately upon the action of
the Board directing the Company to redeem the Rights, the Rights
will terminate and the only right of the holders of Rights will
be to receive the $0.01 redemption price.
Exchange of Rights
At any time after a person becomes an Acquiring Person, but
before any person acquires beneficial ownership of 50% or more of
the outstanding Common Stock, the Board may direct the Company to
exchange the Rights (other than Rights owned by such person or
certain related parties, which will have become null and void),
in whole or in part, at an exchange ratio of one share of Common
Stock per Right (subject to adjustment). The Company may
substitute shares of Preferred Stock (or shares of a class or
series of the Companys preferred stock having equivalent rights,
preferences, and privileges) for Common Stock at an initial rate
of one one-thousandth of a share of Preferred Stock (or of a
share of a class or series of the Companys preferred stock having
equivalent rights, preferences, and privileges) per share of
Common Stock. Immediately upon the action of the Board directing
the Company to exchange the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the
number of shares of Common Stock (or one one-thousandth of a
share of Preferred Stock or of a share of a class or series of
the Companys preferred stock having equivalent rights,
preferences, and privileges) equal to the number of Rights held
by such holder multiplied by the exchange ratio.
Adjustments to Prevent Dilution; Fractional Shares
The Board may adjust the Purchase Price, the number of shares of
Preferred Stock or other securities or assets issuable upon the
exercise of a Right, and the number of Rights outstanding to
prevent dilution that may occur (a)in the event of a stock
dividend on, or a subdivision, combination, or reclassification
of, the Preferred Stock, (b)in the event of a stock dividend on,
or a subdivision or combination of, the Common Stock, (c)if
holders of the Preferred Stock are granted certain rights,
options, or warrants to subscribe for Preferred Stock or
convertible securities at less than the current market price of
the Preferred Stock, or (d)upon the
5
distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular periodic cash
dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments amount to at least 1% of
the Purchase Price. No fractional shares of Preferred Stock will
be issued (other than fractions that are integral multiples of
one one-thousandth of a share of Preferred Stock), and in lieu
thereof, an adjustment in cash may be made based on the market
price of the Preferred Stock on the last trading date prior to
the date of exercise.
No Stockholder Rights Prior to Exercise; Tax
Considerations
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other
consideration) of the Company or for common shares of the
acquiring company or in the event of the redemption of the Rights
as set forth above.
Amendment of Rights Agreement
The Company, by action of the Board, may supplement or amend any
provision of the Rights Agreement in any respect without the
approval of any registered holder of Rights, including, without
limitation, in order to (a)cure any ambiguity, (b)correct or
supplement any provision contained in the Rights Agreement that
may be defective or inconsistent with other provisions of the
Rights Agreement, (c)shorten or lengthen any time period under
the Rights Agreement, or (d)otherwise change, amend, or
supplement any provisions of the Rights Agreement in any manner
that the Company deems necessary or desirable; provided, however,
that no supplement or amendment made after a person becomes an
Acquiring Person shall adversely affect the interests of the
registered holders of rights certificates (other than an
Acquiring Person or any affiliated or associated persons of an
Acquiring Person or certain of their transferees) or shall cause
the Rights Agreement to become amendable other than in accordance
with the amendment provision contained therein. Without limiting
the foregoing, the Company, by action of the Board, may at any
time before any person becomes an Acquiring Person amend or
supplement the Rights Agreements to make provisions of the Rights
Agreement inapplicable to a particular transaction by which a
person might otherwise become an Acquiring Person or to otherwise
alter the terms and conditions of the Rights Agreement as they
may apply with respect to any such transaction.
| Item3.03 |
Material Modification to Rights of Security Holders. |
See the description set out under Item 1.01 – Entry into a
Material Definitive Agreement, which is incorporated by reference
into this Item3.03.
6
| Item5.03 |
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
In connection with the adoption of the Rights Agreement described
in Item1.01 above, the Board of Directors approved a Certificate
of Designation, Preferences, and Rights of Series D Junior
Participating Preferred Stock of Arrowhead Pharmaceuticals, Inc.
(the Certificate of Designation). The Certificate of
Designation was filed with the Secretary of State of the State of
Delaware and became effective on March22, 2017. The Certificate
of Designation is attached hereto as Exhibit3.1 and is
incorporated herein by reference.
| Item5.07 |
Submission of Matters to a Vote of Security Holders |
The following proposals were submitted to the stockholders of the
Company at the 2017 Annual Meeting of Stockholders (the Annual
Meeting) held on March21, 2017.
|
Election of five directors to serve as members of the Companys Board of Directors until the next annual meeting of stockholders or until their successors are elected; |
|
Approval, on a non-binding, advisory basis, of the compensation of the Companys named executive officers for fiscal 2016; |
|
Ratification of Rose Snyder Jacobs as independent auditors of the Company for the fiscal year ended September30, 2017. |
As of January27, 2017, the record date for the Annual Meeting,
the Company had 74,569,706 shares of Common Stock outstanding and
entitled to vote. At the Annual Meeting, 46,675,026 shares were
present in person or represented by proxy and entitled to vote.
The number of votes cast for and against and the number of
abstentions and broker non-votes with respect to each matter
voted upon are set forth below:
Board of Director Election Results
|
NAME |
FOR | WITHHELD | NONVOTES | |||||||||
|
Christopher Anzalone |
20,213,987 | 2,118,414 | 24,342,625 | |||||||||
|
Mauro Ferrari |
17,954,302 | 4,378,099 | 24,342,625 | |||||||||
|
Edward W. Frykman |
17,635,562 | 4,696,839 | 24,342,625 | |||||||||
|
Douglass Given |
19,186,787 | 3,145,614 | 24,342,625 | |||||||||
|
Michael S. Perry |
17,958,088 | 4,374,313 | 24,342,625 |
Approval, on a non-binding, advisory basis, of the
compensation of the Companys named executive officers for the
2016 fiscal year
11,244,932 FOR 10,836,705 AGAINST 250,764
ABSTAIN 24,342,625 NON VOTES
7
The proposal was approved.
Ratification of Rose, Snyder Jacobs as Arrowheads
independent public accounting firm
43,986,930 FOR 1,805,612 AGAINST 882,484
ABSTAIN
The appointment was ratified.
| Item9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
|
ExhibitNo. |
Description |
|
| 3.1 |
Certificate of Designation, Preferences, and Rights of Series D Junior Participating Preferred Stock of Arrowhead Pharmaceuticals, Inc. (filed herewith). |
|
| 4.1 |
Rights Agreement dated as of March 21, 2017, by and between the Company and Computershare Trust Company, N.A., as rights agent, which includes as Exhibit B the Form of Rights Certificate (filed herewith). |
8
About ARROWHEAD PHARMACEUTICALS, INC. (NASDAQ:ARWR)
Arrowhead Pharmaceuticals, Inc., formerly Arrowhead Research Corporation, develops medicines that treat intractable diseases by silencing the genes that cause them. Using a portfolio of ribonucleic acid (RNA) chemistries and modes of delivery, the Company’s therapies trigger the RNA interference mechanism to induce knockdown of target genes. The Company is focused on developing drugs for diseases with a genetic basis, characterized by the overproduction of one or more proteins. The Company’s preclinical pipeline of RNA interference (RNAi) therapeutics includes both subcutaneously administered liver-targeted candidates and extra-hepatic candidates. The Company’s pre-clinical-stage drug candidates include ARO-HBV, ARO-AAT, ARO-LPA, ARO-AMG1, ARO-F12 and ARO-HIF2. ARO-HBV is an RNAi therapeutic candidate for the treatment of chronic hepatitis B infection. ARO-AAT is a therapeutic candidate for the treatment of liver disease associated with Alpha-1 Antitrypsin Deficiency. ARROWHEAD PHARMACEUTICALS, INC. (NASDAQ:ARWR) Recent Trading Information
ARROWHEAD PHARMACEUTICALS, INC. (NASDAQ:ARWR) closed its last trading session down -0.03 at 1.80 with 735,085 shares trading hands.