REGENERON PHARMACEUTICALS, INC. (NASDAQ:REGN) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
In connection with the Collaboration described above, Regeneron and Alnylam have entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) and an Investor Agreement (the “Investor Agreement”), each dated April 8, 2019. to the terms of the Stock Purchase Agreement, Regeneron has agreed to purchase from Alnylam 4,444,445 shares of Alnylam common stock, par value $0.01 per share (“Common Stock”), or, if Stockholder Approval (as defined below) is not obtained at Alnylam’s 2019 Annual Meeting of Stockholders (currently scheduled to be held on April 25, 2019), 1,481,482 shares of Alnylam Series A Redeemable Convertible Preferred Stock, par value $0.01 per share (“Preferred Stock”), in each case, for aggregate cash consideration of approximately $400 million (the “Equity Transaction”).
If issued, each share of Preferred Stock will automatically convert, following receipt of approval by Alnylam’s stockholders to increase the number of shares of authorized Common Stock issuable under Alnylam’s certificate of incorporation by at least the number of shares of Common Stock issuable under the Stock Purchase Agreement (“Stockholder Approval”), into three shares of Common Stock. If any shares of Preferred Stock are outstanding at the expiration of the Lock-Up Period (as defined below), Regeneron will have a right to request Alnylam to redeem such shares at a price per share equal to three times the volume-weighted average price of a share of Common Stock for the 15 trading days prior to the date of Regeneron’s request for such redemption.
to the Stock Purchase Agreement, as a condition to closing, Alnylam must file (i) if Stockholder Approval is not timely obtained, a certificate of designations in respect of the Preferred Stock; or (ii) if Stockholder Approval is timely obtained, a certificate of amendment to its certificate of incorporation to increase the number of authorized shares of Common Stock thereunder by at least the number of shares of Common Stock issuable under the Stock Purchase Agreement. The Stock Purchase Agreement also contains customary representations, warranties, and other customary covenants of each of the parties. Subject to the satisfaction or waiver of the closing conditions, including the expiration or early termination of the applicable pre-merger waiting period under the HSR Act, the Equity Transaction is expected to close during the second quarter of 2019.
Under the Investor Agreement, Regeneron has agreed to certain standstill provisions whereby Regeneron is obligated, during the research term of the Collaboration and under certain circumstances for up to two years thereafter, to refrain from seeking to directly or indirectly exert control of Alnylam or acquiring more than 30% of outstanding shares of Common Stock (including any shares of Common Stock issuable upon conversion of outstanding Preferred Stock), subject to certain exceptions. In addition, Regeneron has agreed, subject to limited exceptions, not to sell or otherwise transfer any of the shares purchased by it under the Stock Purchase Agreement (the “Shares”) or any other shares of Common Stock held by it or its subsidiaries at the closing of the Collaboration for a period ending on the earlier of four years after the Effective Date or the termination of the Master Agreement (the “Lock-Up Period”). After the expiration of the Lock-Up Period, if Regeneron exceeds a specified beneficial ownership threshold, Regeneron will be subject to certain volume restrictions with respect to its sale of shares of Common Stock, unless Alnylam consents otherwise or such sale is made to a registered underwritten public offering. Regeneron has further agreed to vote all of the voting securities of Alnylam it holds in accordance with the recommendation of Alnylam’s board of directors, other than with respect to certain extraordinary matters (including a change in control of Alnylam). The voting agreement expires, among other events, on the date on which Regeneron (together with its affiliated permitted transferees) no longer holds at least 1% of the outstanding shares of Common Stock. The Investor Agreement also provides that, following the Lock-Up Period, Regeneron will have certain demand and piggyback registration rights with respect to the Shares, subject to customary conditions (including underwriter cutbacks). The foregoing rights and restrictions under the Investor Agreement are subject to termination upon the occurrence of certain events, as described therein.
The Stock Purchase Agreement may be terminated at any time prior to closing by mutual consent; by Regeneron if closing has not occurred by September 30, 2019; or by either party if any specified closing condition becomes incapable of fulfillment for a reason other than that party’s failure to fulfill its obligations under the Stock Purchase Agreement, or upon the breach by the other party of any covenant or agreement or upon a representation or warranty given by the other party becoming untrue, in each case, so that certain closing conditions cannot be met.
The foregoing description of the Equity Transaction and the Investor Agreement is qualified in its entirety by reference to the full text of the Stock Purchase Agreement and the Investor Agreement, respectively, a copy of each of which will be filed with the SEC as an exhibit to the 2Q19 Form 10-Q.
About REGENERON PHARMACEUTICALS, INC. (NASDAQ:REGN)
Regeneron Pharmaceuticals, Inc. is a biopharmaceutical company that discovers, invents, develops, manufactures and commercializes medicines for the treatment of serious medical conditions. The Company’s segment includes activities related to the discovery, development and commercialization of pharmaceutical products for the treatment of serious medical conditions. It commercializes medicines for eye diseases, high low-density lipoprotein (LDL) cholesterol and a rare inflammatory condition, and has product candidates in development in other areas of unmet medical need, including oncology, rheumatoid arthritis (RA), asthma, atopic dermatitis, pain and infectious diseases. Its marketed products include EYLEA (aflibercept) injection, Praluent (alirocumab) Injection and ARCALYST (rilonacept) injection for subcutaneous use. Its other products include Sarilumab (REGN88), Dupilumab (REGN668), REGN2222, Fasinumab (REGN475), REGN2810, REGN2176-3, Evinacumab (REGN1500) and REGN1908-1909.
