Applied Genetic Technologies Corporation (Nasdaq: AGTC), a
clinical-stage biotechnology company focused on the development and
commercialization of adeno-associated virus (AAV)-based gene
therapies for the treatment of rare and debilitating diseases with
an initial focus on inherited retinal diseases (IRDs), today
announced that it has entered into a definitive agreement pursuant
to which a newly established portfolio company of Syncona Limited
(LON: SYNC), a leading healthcare company focused on founding,
building and funding global leaders in life science, will acquire
AGTC, through a tender offer, for approximately $23.5 million
($0.34 per share) in cash at the closing of the transaction plus
potential future aggregate cash payments of up to $50.0 million (up
to $0.73 per share) pursuant to contingent value rights (CVRs). The
board of directors of AGTC unanimously recommends that the
shareholders of AGTC tender their shares in the tender offer once
it is commenced.
“This transaction represents an attractive upfront cash offer to
shareholders at a premium of approximately 42% to the current share
price, with the potential to receive future upside based on the
clinical success of XLRP and other pipeline assets through CVRs,”
said Dr. Scott Koenig, Chairman of AGTC’s board of directors. “Our
board and leadership team evaluated all alternative options to
progress AGTC-501. Given the state of equity and other funding
markets, we see significant challenges in funding ongoing
operations beyond 2022. We believe that this transaction clearly
will deliver the best value to our shareholders. AGTC’s
board of directors has unanimously approved the offer and strongly
encourages shareholders to tender their shares.”
“Our team has completed groundbreaking work for patients living
with devastating retinal diseases,” said Sue Washer, President and
Chief Executive Officer of AGTC. “This transaction allows continued
progress in advancing an important therapy for XLRP patients while
also maximizing immediate and potential long-term value to our
shareholders. On closing, AGTC will be Syncona’s third company
focused on retinal gene therapy, and we look forward to
transitioning AGTC-501 to Syncona’s experienced stewardship with
the goal of advancing this differentiated product candidate to
patients with XLRP.”
“We share AGTC’s passion in developing life changing treatments
for patients with diseases with no currently approved therapies,”
said Chris Hollowood, Chief Investment Officer of Syncona
Investment Management Limited. “Syncona has significant expertise
in AAV gene therapy, and in particular, a strong track record of
building retinal gene therapy businesses. We believe AGTC’s XLRP
program has the potential to be a best-in-class product that could
transform the lives of patients suffering with this devastating
blinding condition.”
Under the terms of the definitive agreement, an indirect
subsidiary of Syncona Limited will initiate a tender offer to
acquire all outstanding shares of AGTC common stock. The upfront
cash consideration in the transaction will consist of $0.34 per
share of AGTC common stock (including common stock underlying
restricted stock units and in-the-money stock options). AGTC equity
holders will also receive in the transaction, for each share of
AGTC common stock, one non-tradeable CVR. The holders of the CVRs
will be entitled to receive payments of up to an additional $50.0
million in the aggregate upon the achievement of certain milestones
related to transactions involving AGTC’s assets and regulatory and
commercial milestones related to AGTC’s products. The $0.34 per
share represents a premium of approximately 42% and the potential
for up to $1.07 per share (inclusive of the potential CVR value)
represents a premium of up to approximately 344% over AGTC’s
closing stock price on October 21, 2022.
Under the terms of the definitive agreement, any shares not
tendered in the tender offer will be acquired in a second-step
merger at the same cash price as paid in the tender offer. The
closing of the transaction is subject to customary closing
conditions, including that the number of shares validly tendered
and not validly withdrawn represents a majority of all shares of
AGTC common stock then outstanding (treating as outstanding the
shares underlying outstanding restricted stock units) plus the
aggregate number of shares issuable to holders of stock options and
warrants in respect of which AGTC has received notices of exercise
prior to the expiration of the tender offer. Upon the closing of
the transaction, the shares of AGTC’s common stock will no longer
be listed on any public market. Subject to certain limited
exceptions, the CVRs will be non-transferable. There can be no
assurance that any contingent payments will be paid. Syncona plans
to finance the upfront cash consideration in the transaction with
cash on hand.
The transaction was unanimously approved by AGTC’s board of
directors and is expected to close in the fourth quarter of 2022.
All of the members of AGTC’s board of directors and the executive
officers of AGTC entered into a tender and support agreement with
respect to all of the shares of AGTC common stock and/or stock
options held by such persons (representing in the aggregate less
than 1% of AGTC’s equity), pursuant to which each such person
agreed, among other things, to vote against other proposals to
acquire AGTC and, subject to certain exceptions, to tender such
person’s AGTC shares pursuant to the tender offer.
MTS Health Partners, L.P. is acting as financial advisor to AGTC
in connection with the transaction. Foley Hoag LLP is acting as
legal advisor to AGTC in connection with the transaction. BTIG LLC
is acting as financial advisor to Syncona and Mintz, Levin, Cohn,
Ferris, Glovsky & Popeo, P.C. is acting as legal advisor to
Syncona in connection with the transaction.
Conference Call and Webcast
Syncona and AGTC will host a conference call and webcast to
review the details of the transaction on October 24, 2022
at 7:30 a.m. ET. To access the call, dial 877-407-6184 (U.S.
participants) or 201-389-0877 (non-U.S. participants). A live
webcast will be available in the Events and Presentations section
of AGTC’s Investor Relations site
at http://ir.agtc.com/events-and-presentations.
Please log in approximately 10 minutes prior to the scheduled
start time. The archived webcast will be available in the Events
and Presentations section of AGTC’s website following the call.
About Syncona
Syncona’s purpose is to invest to extend and enhance human
life. We do this by founding and building companies to deliver
transformational treatments to patients in areas of high unmet
need. Our strategy is to found, build and fund companies around
exceptional science to create a diversified portfolio of 15-20
globally leading healthcare businesses for the benefit of all our
stakeholders. We focus on developing treatments for patients by
working in close partnership with world-class academic founders and
management teams. Our balance sheet underpins our strategy enabling
us to take a long-term view as we look to improve the lives of
patients with no or poor treatment options, build sustainable life
science companies and deliver strong risk-adjusted returns to
shareholders.
About AGTC
AGTC is a clinical-stage biotechnology company developing
genetic therapies for people with rare and debilitating ophthalmic,
otologic and central nervous system (CNS) diseases. AGTC is
designing and constructing critical gene therapy elements and
bringing them together to develop customized therapies with the
potential to address unmet patient needs. AGTC’s most advanced
clinical programs in XLRP and ACHM CNGB3 leverage its technology
platform to potentially improve vision for patients with inherited
retinal diseases. Its preclinical programs build on AGTC’s AAV
manufacturing technology and scientific expertise. AGTC is
advancing multiple pipeline candidates to address substantial unmet
clinical needs in optogenetics, otology and CNS disorders, and has
entered into strategic collaborations with companies including
Bionic Sight, Inc., an innovator in the emerging field of
optogenetics and retinal coding, and Otonomy, Inc., a
biopharmaceutical company dedicated to the development of
innovative therapeutics for neurotology.
Important Information for Stockholders of Applied
Genetic Technologies Corporation
The tender offer for the outstanding shares of AGTC referenced
in this press release has not yet commenced. This press release is
for informational purposes only and is neither an offer to purchase
nor a solicitation of an offer to sell shares, nor is it a
substitute for the tender offer materials that subsidiaries of
Syncona Limited will file with the Securities and Exchange
Commission (SEC). At the time the tender offer is commenced,
subsidiaries of Syncona Limited will file tender offer materials on
Schedule TO, and, thereafter, AGTC will file a
Solicitation/Recommendation Statement on Schedule 14D-9 with the
SEC with respect to the tender offer. THE TENDER OFFER MATERIALS
(INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL
AND CERTAIN OTHER TENDER OFFER DOCUMENTS) AND THE
SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF SHARES OF AGTC COMMON STOCK ARE URGED TO
READ THESE DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE (AS EACH
MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME) BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF SHARES OF AGTC COMMON
STOCK SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING
TENDERING THEIR SHARES. The Offer to Purchase, the related Letter
of Transmittal and certain other tender offer documents, as well as
the Solicitation/Recommendation Statement, will be made available
to all holders of shares of AGTC common stock at no expense to
them. The tender offer materials and the
Solicitation/Recommendation Statement will be made available for
free at the SEC’s website at www.sec.gov. Additional copies of the
tender offer materials may be obtained for free by contacting
Georgeson LLC, Syncona’s Information Agent, at 800-279-6913 or 1290
Avenue of the Americas, 9th Floor, New York, NY 10104.
Forward-looking Statements
Statements in this press release regarding the proposed
transactions between Syncona and AGTC, the expected timeline for
completing the transactions, the anticipated contingent value right
payments, future financial and operating results and benefits and
synergies of the transaction, future opportunities for the combined
company and any other statements about future expectations,
beliefs, goals, plans or prospects constitute forward-looking
statements. Any statements that are not statements of historical
fact (including statements containing “believes,” “anticipates,”
“plans,” “expects,” “may,” “will,” “would,” “intends,” “estimates”
and similar expressions) should also be considered to be
forward-looking statements. There are a number of important factors
that could cause actual results or events to differ materially from
those indicated by such forward-looking statements, including: the
risk that the proposed transactions may not be completed in a
timely manner, or at all; the failure to satisfy all of the closing
conditions of the proposed transactions; the occurrence of any
event, change or other circumstance that could give rise to the
termination of the merger agreement and the tender offer
thereunder; the effect of the announcement or pendency of the
proposed transactions on both Syncona’s and AGTC’s businesses,
operating results and relationships with customers, suppliers,
competitors and others; the risk that the proposed transactions may
disrupt Syncona’s and AGTC’s current plans and business operations;
potential difficulties retaining employees as a result of the
proposed transactions; risks related to the diverting of
management’s attention from AGTC’s ongoing business operations; the
outcome of any legal proceedings that may be instituted against
AGTC related to the merger agreement or the tender offer
thereunder; risks relating to product development and
commercialization and demand for AGTC’s products (and, as such,
uncertainty that the milestones for the contingent value right
payments may not be achieved); risks associated with competition;
and other commercial and risks discussed in the “Risk Factors”
section of AGTC’s Annual Report on Form 10-K for the fiscal year
ended June 30, 2022. In addition, the forward-looking statements
included in this press release represent AGTC’s views as of October
23, 2022. It is anticipated that subsequent events and developments
will cause such views to change. However, while they may elect to
update these forward-looking statements at some point in the
future, AGTC specifically disclaims any obligation to do so. These
forward-looking statements should not be relied upon as
representing AGTC’s views as of any later date.
Applied Genetic Technologies Corporation
Contacts:
IR Contact:David CareyLazar FINN PartnersT:
(212) 867-1768david.carey@finnpartners.com
Corporate Contact:Jonathan LieberChief
Financial OfficerApplied Genetic Technologies CorporationT: (617)
843-5778jlieber@agtc.com
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