BEIGENE,LTD. (NASDAQ:BGNE) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive
Agreement
Equity Joint Venture Contract
On March7, 2017, BeiGene (Hong Kong) Co., Limited (BeiGene HK), a
wholly owned subsidiary of BeiGene,Ltd. (the Company), entered
into an equity joint venture contract (the JV Agreement) with
Guangzhou GET Technology Development Co., Ltd. (GET) relating to
the formation of BeiGene Biologics Co.,Ltd. (the JV Company), a
Sino-foreign equity joint venture enterprise incorporated under
the laws of the Peoples Republic of China (PRC), to research,
develop and produce biologics products in the PRC.
BeiGene HK will make an initial cash capital contribution of
RMB200 million and a subsequent contribution of one or more
biologics assets in exchange for a 95% equity interest in the JV
Company. GET will provide a total of RMB1 billion cash to the JV
Company including a 5% equity interest in the JV Company and a
shareholder loan (the Shareholder Loan) to the JV Company. The
Shareholder Loan may be convertible, either partially or in full,
to an additional mid-single digit percentage equity interest in
the JV Company, or paid upon the maturity of the loan. See
disclosures under caption Capital Increase Agreement and
Shareholder Loan Contract for additional details of these
agreements.
The JV Company will establish a manufacturing factory (the
Factory) in Guangzhou through a wholly-owned subsidiary (the
Factory Sub) to manufacture biologics, with a registered capital
of RMB1 billion. The Factory Sub expects to acquire at least
100,000 square meters of land for the Factory in the
Sino-Singapore Guangzhou Knowledge City and borrow RMB1 billion
commercial bank loan for the purpose of the construction and
operation of the Factory.
The JV Company will be governed by a five-member board of
directors (the JV Board), four of whom will be appointed by
BeiGene HK and one by GET. The initial term for JV Board members
is five years, followed by three-year terms. The chairman of the
JV Board will be appointed by BeiGene HK. During the period when
the Shareholder Loan is still a convertible loan, certain matters
may only be approved by unanimous vote of the JV Board and each
of BeiGene HK and GET will also appoint one supervisor, whose
primary duty is to, to the PRC Company Law, examine the financial
affairs of the JV Company and the conduct of the JV Board and
management.
The JV Agreement contains certain restrictions on the transfer of
equity interest in the JV Company, including rights of first
refusal for proposed transfers to third parties.
The JV Company has a 50-year term, subject to extension. The JV
Agreement may be terminated by written agreement between the
parties. Either party may terminate the JV Agreement unilaterally
in the event that (1)the update of the JV Companys business
license as a result of the transaction contemplated under the
Capital Increase Agreement is not completed by May31, 2017;
(2)the other party fails to contribute the registered capital
within a certain period of time; (3)the other partys breach
leading to the failure of the debt-to-equity conversion and/or
BeiGene HKs contribution of a certain biologic asset, or assets;
or (4)the other party is in liquidation or bankruptcy proceeding.
Additionally, BeiGene HK may terminate the JV Agreement
unilaterally in the event that (1)GET fails to provide the
Shareholder Loan; (2)GET violates the equity transfer
restrictions; (3)a change of control of GET results in the
control of GET by a competitor; or (4)material breaches by a GET
affiliate of investment agreement provisions that provide for
certain subsidies and benefits. In the event that BeiGene HK
unilaterally terminates the JV Agreement to certain termination
provisions, BeiGene HK has the right to purchase all of GETs
equity interest in the JV Company at the market price.
Capital Increase Agreement
In conjunction with the JV Agreement, on March7, 2017, the JV
Company entered into a capital increase agreement with BeiGene
HK and GET (the Capital Increase Agreement), to govern the
capital contributions to the JV Company. BeiGene HK will
contribute RMB200 million cash capital contribution over a
three-year period commencing March31, 2017. GET will contribute
its full cash contribution on March31, 2017. The Capital
Increase Agreement may be terminated by written agreement among
the parties. Any party may terminate the Capital Increase
Agreement unilaterally in the event that (1)the update of the
JV Companys business license as a result of the transaction
contemplated under the Capital Increase Agreement is not
completed by May31, 2017; or (2)a material breach is not cured
within a certain period of time.
Shareholder Loan Contract
In conjunction with the JV Agreement, on March7, 2017, the JV
Company entered into a shareholder loan contract (the
Shareholder Loan Contract) with GET relating to a loan of no
more than RMB1 billion from GET to the JV Company with an
interest rate of 8% per annum. The term of the Shareholder Loan
is 72 calendar months, commencing from the actual draw down
date indicated in the receipt of the Shareholder Loan. No
accrued interest is due and payable prior to the repayment of
the principal or the debt-to-equity conversion. GET will
provide the Shareholder Loan to the JV Company in one lump-sum
payment not later than March31, 2017. The Shareholder Loan may
be prepaid or converted in full or partially into a mid-single
digit percentage equity interest in the JV Company prior to its
maturity date to the terms of the JV Agreement upon the
achievement of certain regulatory milestones. The Shareholder
Loan can only be used for the JV Company, including the
construction and operation of the Factory and research and
development and clinical trials to be carried out by the JV
Company. If the JV Company does not use the Shareholder Loan
proceeds for the specified purposes, GET may be entitled to
certain liquidated damages. In the event of an early
termination of the JV Agreement, the Shareholder Loan will
become due and payable at the time of termination of the JV
Agreement.
Commercial Loan(s)
The Factory Sub expects to borrow RMB1 billion in the form of a
commercial loan(s)and expects to receive certain interest
subsidies for commercial loan interest payment(s), subject to
limitation.
The foregoing descriptions of the terms of the various
agreements do not purport to be complete and are qualified in
their entirety by reference to the full text of such
agreements, which the Company intends to file as exhibits to a
subsequent periodic report.
Item 2.03 Creation of a Direct
Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
Please see the disclosure set forth under Item 1.01 under the
captions Shareholder Loan Contract and Commercial Loan(s),
which is incorporated by reference into this Item 2.03.
Item 7.01 Regulation FD
Disclosure.
On March7, 2017, the Company issued a press release announcing
joint venture transaction described under Item 1.01. A copy of
the press release is furnished as Exhibit99.1 hereto and shall
not be deemed to be filed for purposes of Section18 of the
Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that Section11 and 12(a)(2)of the
Securities Act of 1933, as amended.
Item9.01 Financial Statements and
Exhibits.
(d)Exhibits.
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ExhibitNo. |
|
Description |
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99.1 |
Press Release issued on March7, 2017, furnished herewith |
About BEIGENE, LTD. (NASDAQ:BGNE)
BeiGene, Ltd. is a biopharmaceutical company. The Company is engaged in the discovery and development of molecularly targeted and immuno-oncology drugs for the treatment of cancer. It is developing its product candidate, BGB-3111, a potent and selective small molecule Bruton’s tyrosine kinase (BTK) inhibitor, as a monotherapy and in combination with other therapies for the treatment of a range of lymphomas. It is developing its product candidate, BGB-A317, a humanized monoclonal antibody against the immune checkpoint receptor programmed cell death protein 1 (PD-1), as a monotherapy and as a combination agent for various solid-organ and blood-borne cancers. It is developing BGB-290, a molecularly targeted, orally available, potent and selective inhibitor of poly ADP ribose polymerase 1 (PARP1) and PARP2, as a monotherapy and in combination with other therapies for the treatment of homologous recombination deficient cancers. It is also developing BGB-283 for the treatment of cancers. BEIGENE, LTD. (NASDAQ:BGNE) Recent Trading Information
BEIGENE, LTD. (NASDAQ:BGNE) closed its last trading session down -0.95 at 39.82 with 159,882 shares trading hands.
