On June 1, 2023, Management, together with the Companys advisors, refined the calculation of the
Companys net cash at closing, and the Company returned a revised indication of interest proposing for Lilly to acquire the outstanding Shares of the Company that it did not already own in exchange for an upfront cash payment equal to
approximately $35.2 million ($15.13 per share) and one CVR representing the right to receive up to three contingent cash payments, as described in Lillys proposal on May 30, 2023.
Also on June 1, 2023, Lazard, at the request of the Company Board, also contacted Party J and Party K, a large international pharmaceutical company with
commercialized diabetes products, to ask if they would consider submitting competing proposals. Both Party J and Party K declined to engage.
Also on
June 1, 2023, the Company opened a virtual data room to allow Lilly to begin its due diligence process.
On June 9, 2023, the Company and Lilly
executed the indication of interest, which reflected the terms set forth in the version provided by the Company on June 1, 2023.
On June 12,
2023, the compensation committee of the Company Board (the Compensation Committee) met to discuss the treatment of the Companys outstanding equity awards and other compensation-related matters in connection with the Transactions.
On June 15, 2023, Lillys outside legal counsel, Morgan, Lewis & Bockius LLP (Morgan Lewis), sent an initial draft of the
Merger Agreement to the Company.
Between June 16 and June 28, 2023, the per share trading price dropped from $5.66 to $3.93 per Share.
On June 19, 2023, Morgan Lewis sent an initial draft of the CVR Agreement and Tender and Support Agreement. Over the next week, Morgan Lewis and
Ropes & Gray exchanged drafts of the Merger Agreement, CVR Agreement and Tender and Support Agreement and held calls to discuss the terms of the Merger Agreement, including the fees payable by the Company to Lilly upon termination of the
Merger Agreement in certain circumstances, the terms of the Offer, interim covenants and closing conditions.
Between June 24 and June 25, 2023,
Lilly, the Company and representatives of Lazard discussed calculations of the Companys net cash, severance obligations and integration expenses and Lilly concluded that it would propose that the upfront amount to be paid for Shares would be
$14.92 per Share.
On June 26, 2023, Dr. Vivaldi sent an email to the Company Board regarding the status of negotiations with Lilly.
Dr. Vivaldi explained that Lilly, based on updated net cash and expense estimates, had proposed an upfront cash payment of $14.92 per Share, with a CVR representing the right to receive three contingent cash payments: (i) $4.06 per CVR upon
first human dosing in a Phase I Clinical Trial; (ii) $26.39 per CVR upon first dosing in a Pivotal Trial; and (iii) $81.19 per CVR upon marketing approval in the United States, Japan or three of France, the United Kingdom, Italy, Spain and Germany.
Dr. Vivaldi noted that the parties were close to finalizing the Merger Agreement and the CVR Agreement.
On June 28, 2023, the Company Board
held a meeting attended by members of Management and representatives of Ropes & Gray and Lazard to consider approving the Transactions. At the meeting, representatives of Ropes & Gray summarized the fiduciary duties of the Company
Board under Delaware law and provided an overview of the terms of the Merger Agreement and CVR Agreement. Lazard then reviewed its relationship disclosure, which among other things discussed Lazards relationship with Lilly, and its valuation
analysis related to the Offer and the Merger and responded to questions from the Company Board. Thereafter, Lazard rendered an oral opinion, confirmed by delivery of a written opinion dated June 28, 2023, to the Company Board to the effect
that, as of that date and based upon and subject to the assumptions, procedures, matters, qualifications and limitations set forth in such written opinion, the Offer Price to be paid to holders of the Shares (other than Dissenting Shares and Shares
held in the treasury of the Company or owned by the Company or owned by Lilly, Purchaser or any direct
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