Filed by CM Life Sciences III Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: CM Life Sciences III Inc.
Commission File No.: 001-40312
Date: August 9, 2021
On August 6, 2021, Eli Casdin, the Chief
Executive Officer of CM Life Sciences III Inc., participated in an interview with CNBC’s “The Half Time Report”. A copy
of the transcript from the interview is set forth below:
CNBC / The Half Time Report
Date: August 6th 2021 / 12.30pm
Speaker 1: Scott Wapner
Speaker 2: Keith Meister
Speaker 3: Eli Casdin
<initial section between SW and KM covering the general markets
not included>
Speaker 1 (12:24):
When we come back and mentioned, you just announced
your third SPAC deal in the healthcare space with Eli Casdin of Casdin capital. He's going to join the conversation next. We'll talk
about the big deal today. Some other ideas in healthcare, which has been a great space to be in of late and a reminder, you can always
watch or listen to us live on the, go on the CNBC app. We're back in two minutes, we mentioned our guests, Keith Meister announcing his
third SPAC deal today with partner Eli. Casdin the founder of Casdin Capital, their CM Life Sciences III merging with EQRx. That is a
company focusing on reducing drug prices. Keep is still with us, as we said, along with Eli. Eli. Welcome back. It's nice to see you
again.
Speaker 3 (13:14):
Thanks Scott. Nice to be here
Speaker 1 (13:16):
The first question on this, because this is
somewhat home cooking for you. You were an early investor, any EQ, why this deal, why now?
Speaker 3 (13:25):
Listen, I think that the power of a SPAC platform
is that you can bring enormous amount of capital to a true growth company. And, you know, if it's a growth company, if you give it more
money and it goes faster and EQRx is one such business, this deal will bring about a billion and a half dollars to the balance sheet
of the company and allow it to accelerate its business model of disrupting, the distribution model for drug development, bringing in
innovative drugs, partnering with payers and selling it to the patient at a discount. This is the exact kind of thing that we set out
to do.
Speaker 1 (14:02):
Keith, is it harder to impress the market these
days with deals like this? I'm just noticing it's a touch below 10 bucks, which is, you know, the, the demarcation line, if you will
inspect land.
Speaker 2 (14:13):
Well, the answer to that question is yes, there's
clearly been a lot of pain in the SPAC ecosystem. There was too many SPACs and too many deals that's okay. So, now as you work through
that pain, the fact that we can raise $1.2 billion for our PIPE, from some of the leading investors in the world, whether they be growth
investors like SoftBank, whether they'd be long, only investors like fidelity, or whether they be some of the early venture capital investors
in the company like Andreessen Horowitz. So, from some of the best investors in the world, as well as from strategic partners who are
ultimately going to put their money where their mouth is and be partners with EQRx is a great thing. We negotiate it's actually way healthier,
right? We negotiated a deal with the EQRx management team to put money in at a fair value, right?
Speaker 2 (15:00):
It's a euphoric market, where that rewrites
the next day up 80% like it did on our first deal. Now ultimately, where we should be judged is where does this company trade 1, 3, 5
years from now? And by putting, as Eli said earlier, I think the company will have close to $2 billion with a $1.8 billion we are putting
in, plus the $300 million on their balance sheet, by putting $2 billion on this company's balance sheet, they can actually innovate and
have enough money to go bigger and faster. And you know, what EQRx is set up to do is something we're going to look back on and say, this
is inevitable. Why did it take so long? And what that is, is to take all the innovation that's occurring in drug development and let it
flow through to the patient by lowering drug prices. So simply put, what EQRx does is they develop the same drugs that are developed by
the largest pharma companies today, the largest pharma companies sell for $200k to $300k.
EQRx develops them. They're patently different
substantially, the same, our better and they develop the drugs. And by partnering with what they call a global buyers club, the payers,
they say, we'll sell you that drug for 25, 30, 35% of the price. So instead of $200k, it's $50k. And what they asked for in return from
the payer is we need you to pull this product to your members. So instead of spending pharma companies spending lots of money on shiny
super bowl commercials, and having to use that to offset the price of the $200k drug, EQRx acts by having scale relationships with this
global buyers club can sell the drug for a much lower price without having to have a Salesforce without having to have a huge marketing
expenditure, save the consumer, lots of money and also make margins that are consistent with where big pharma is today.
Speaker 2 (16:52):
Now it sounds really easy to do, but it hasn't
happened yet. And the reason why it hasn't happened yet is it takes a massive amount of capital. It takes a great team and lots of early
success. And the founder of EQRx Alexis Borisy is as proven an entrepreneur as there in the space. He's assembled an amazing team with
his co-founder, a co-founder, Melanie Nallicheri, and Jami Rubin from Goldman and a team of the best drug hunters. They have two molecules
that have had massive early success a line of sight from just those two products to $2 billion of revenue. And then, what Eli's insight
was as a founding investor was now was the time for a bigger boat. And maybe I'll turn it over to Eli to talk about how that bigger boat
is going to add value.
Speaker 1 (17:38):
Well, it is interesting, what ultimately is
going to pay off for investors is the ability for EQRx to actually develop drugs and take them to market. What I'm wondering is number
one, how long is it going to take to do that, right? How long investors are going to have to wait and how ultimately expensive is this
whole process is going to end up being.
Speaker 3 (18:09):
Yeah, listen, I think that that is the power
of this model, which is to say, um, and I think we all know it to be true. Having lived through this COVID and the vaccine, the innovation
engine in the biotech industry is, you know, at full speed and these drugs are coming out. There's actually enormous amount of inventory
of innovative drugs out there that EQRx is actually licensing in. So it stopped a traditional sort of biotech model, which we invest
in heavily where you have a good idea and R&D dollars and seven years later, you'd have a product that is going out into proven,
genetically defined diseases and cancer inflammation, and going on getting molecules that have 50, 60, 70% likelihood of success that
are late stage and can get to the market, and then matching that with the payer. And it changes that whole business model. So, you know,
we're looking in the, 24, 25, 26 that they're going to have actually, commercial products on the market that are incredibly impactful
and better, that help the patient avoid the financial toxicity that is associated with today's drugs.
Speaker 1 (19:22):
But that, that does speak to the weight that
you're asking investors to make with you, right, to, to come along for the ride and that it's ultimately going to prove successful, but
you're going to have to be patient simply. That's the way that this business that, you know, better than most, uh, operates. Even if
the business model may be a little bit different than your traditional biotech, it's still a waiting game and, and a hope and a risk.
Speaker 2 (19:49):
Let me take that for a second. And then Eli,
you can jump in. We may not know how much a product sells, what market share it has until 2025, but there's a lot of things we're going
to know before then that'll be really positive catalyst today. The company has relationships with 20% of the lives in the US that will
go from 20% to a much higher number. As they form new partnerships with other managed care type organizations, and our capital will help
them today. They have 10 molecules, two of which are pre-registration by 2022, they expect to have 22 molecules and our capital will
help accelerate that. So over the next six to 12 months, you're going to see lots more drugs in license, lots more drugs, get through
the different stages of approval, and you're going to see the buyers public span. In my opinion, it's not very hard to assume that when
the market sees a company with a portfolio of 20 drugs, that address $200 billion of spend and see all the buyers, both in the U S and
globally, globally bought in to push those products at massive discounts that you can look back and extrapolate and say, yeah, I don't
know if product A will have 10% share or 25% share, but I do know this at 10% share of this company is going to do billions of dollars
of revenue.
Speaker 2 (21:07):
And at 2025, it's a multiple of that. And this
business will have succeeded in laying the foundation to disrupt the market. And as you look back at other businesses like this and other
spaces, Amazon, Tesla, whichever example you use in hindsight, it's obvious, but the whole key always within you, the team, and they
need the capital. So the reason why SPAC makes sense for EQRx today is not because the stock is going to pop today. The reason why it
makes sense is they're going to put $2 billion on the company's balance sheet with an awesome team, that's the best in the industry.
And as they spend this and with each success, it becomes more obvious that they're going to disrupt the model and the flywheel goes into
effect. And then Eli will tell you, he has innovative companies in his portfolio calling him saying, once they've laid the pipe at EQRx,
can we use them to distribute our product?
So we don't have to invest in sales and marketing.
We can leverage those relationships. So any one drug may take three or five years to get to marketing and get revenue. But I think the
money today is going to prove out the model. And I think people in the industry, especially in this PIPE group really got that. And it
is an awful PIPE market. It is an awful SPAC market. We went out to raise a billion-dollar pipe. We were oversubscribed. We probably
had $500 million to $1 billion dollar of excess demand, and we were able to upsize it. So I think people who get the story realize this
is a really attractive, you know, medium to long-term.
Speaker 1 (22:29):
Eli, give you the last word then I gotta run.
Speaker 3 (22:31):
Yeah, Scott, the only thing I would clarify
is that they have two registrational products that are going to address by 2026, $50 billion in revenue, that sort of risk curve for
their leading assets of whether these drugs work, and they've already crossed over. So this is a company where today the valuation floor
is on drugs that have huge market potentials that are already going to be approved.
Speaker 1 (22:57):
I got you. I'm glad you made that clarification
for us. I appreciate that. Congratulations guys. We'll talk again soon.
[END OF TRANSCRIPT]
Disclaimers
Cautionary Statement Regarding Forward Looking Statements
This communication contains certain forward-looking
statements within the meaning of the federal securities laws with respect to the proposed transaction between EQRx and CM Life Sciences
III, including express or implied statements regarding the anticipated benefits of the transaction, the anticipated timing of the transaction,
the expected cash proceeds from the transaction, the expected continued listing on Nasdaq, EQRx’s ability to accelerate growth and
expand access to innovative medicines, EQRx’s ability to obtain FDA and other approvals of any product candidates in its pipeline,
ability to expand its pipeline, and execute on its business strategy with payers, as well as other statements regarding plans and market
opportunities of EQRx. These forward-looking statements generally are identified by the words “believe,” “project,”
“expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,”
“opportunity,” “plan,” “may,” “should,” “will,” “would,” “will
be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions,
projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject
to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in
this communication, including but not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all,
(ii) the risk that the transaction may not be completed by CM Life Sciences III’s business combination deadline and the potential
failure to obtain an extension of the business combination deadline if sought by CM Life Sciences III, (iii) the failure to satisfy the
conditions to the consummation of the transaction, including the adoption of the merger agreement by the stockholders of CM Life Sciences
III, the satisfaction of the minimum trust account amount following redemptions by CM Life Sciences III’ public stockholders and
the receipt of certain governmental and regulatory approvals, (iv) the lack of a third-party valuation in determining whether or not to
pursue the transaction, (v) the inability to complete the PIPE investment in connection with the transaction, (vi) the occurrence of any
event, change or other circumstance that could give rise to the termination of the merger agreement, (vii) the effect of the announcement
or pendency of the transaction on EQRx’s business relationships, operating results and business generally, (viii) risks that the
proposed transaction disrupts current plans and operations of EQRx and potential difficulties in EQRx employee retention as a result of
the transaction, (ix) the outcome of any legal proceedings that may be instituted against CM Life Sciences III or EQRx related to the
merger agreement or the transaction, (x) the ability to maintain the listing of CM Life Sciences III’s securities on a national
securities exchange, (xi) changes in the competitive and highly regulated industries in which EQRx operates, variations in operating performance
across competitors, changes in laws and regulations affecting EQRx’s business and changes in the combined capital structure, (xii)
risks associated with EQRX’s ability to implement its business plans, including risks associated with its growth strategy, obtaining
regulatory approvals, and creating a global payer network, and other risks associating with its plans to create a new kind of pharmaceutical
company, (xiii) the risk of downturns and a changing regulatory landscape in the highly competitive healthcare and biopharmaceutical industries,
(xiv) the size and growth of the markets in which EQRx operates and its ability to offer innovative medicines at reduced prices, and (xv)
EQRx’s ability to operate as a public company. The foregoing list of factors is not exhaustive. You should carefully consider the
foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of CM Life Sciences III’s
registration statement on Form S-1 (File No. 333-253475), the proxy statement/prospectus included in the registration statement on Form
S-4 to be filed with the SEC in connection with the transaction and other documents filed by CM Life Sciences III from time to time with
the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking statements, and EQRx and CM Life Sciences III assume no obligation
and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.
Neither EQRx nor CM Life Sciences III gives any assurance that either EQRx or CM Life Sciences III or the combined company will achieve
its expectations.
Additional Information and Where to Find It
/ Non-Solicitation
In connection with the proposed transaction, CM Life
Sciences III intends to file a registration statement on Form S-4 with the SEC including the preliminary proxy statement/prospectus. The
definitive proxy statement/prospectus will be sent to the stockholders of CM Life Sciences III. CM Life Sciences III and EQRx also will
file other documents regarding the proposed transaction with the SEC. Before making any voting decision, investors and security holders
of CM Life Sciences III are urged to read the registration statement, the proxy statement/prospectus, and all other relevant documents
filed or that will be filed with the SEC in connection with the proposed transaction as they become available because they will contain
important information about the proposed transaction. Investors and security holders will be able to obtain free copies of the registration
statement, the proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC by CM Life Sciences
III and EQRx through the website maintained by the SEC at www.sec.gov.
The documents filed by CM Life Sciences III with the
SEC also may be obtained free of charge at CM Life Sciences III’s website at https://iii.cmlifesciencesspac.com/ or upon written
request to CM Life Sciences III, c/o Corvex Management, 667 Madison Ave, New York, NY 10065.
Participants in Solicitation
CM Life Sciences III and EQRx and their respective
directors and executive officers may be deemed to be participants in the solicitation of proxies from CM Life Sciences III’s stockholders
in connection with the proposed transaction. Information about CM Life Sciences III’s directors and executive officers and their
ownership of CM Life Sciences III’s securities is set forth in CM Life Sciences III’s filings with the SEC. To the extent
that holdings of CM Life Sciences III’s securities have changed since the amounts printed in CM Life Sciences III’s Registration
Statement on Form S-1, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC.
A list of the names of such directors and executive officers and information regarding their interests in the business combination will
be contained in the proxy statement/prospectus when available. You may obtain free copies of these documents as described in the preceding
paragraph.
No Offer or Solicitation
This communication is not a proxy statement or solicitation
of a proxy, consent or authorization with respect to any securities or in respect of the potential transaction and shall not constitute
an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities
Act, or an exemption therefrom.
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