☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Subject Company Information. |
Identity and Background of Filing Person. |
Past Contacts, Transactions, Negotiations and Agreements. |
• | the accelerated vesting and cash settlement of outstanding Options with exercise prices below the Merger Consideration in connection with the Merger; |
• | the accelerated vesting and cash settlement of outstanding RSUs in connection with the Merger; |
• | the accelerated vesting and cash settlement of certain outstanding PSUs in connection with the Merger; |
• | the potential receipt of severance benefits by executive officers under our severance benefit plan; |
• | the receipt of at least 100% of 2022 target bonuses by executive officers in connection with the Merger; |
• | certain executive officers who may be impacted by the excise tax under Section 4999 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) may be reimbursed for such excise tax, subject to certain limitations; |
• | the entitlement to indemnification benefits in favor of directors and officers of Turning Point; and |
• | the payment of certain cash awards to our non-employee directors in lieu of their annual stock option grants. |
Name of Beneficial Owner | | | Number of Shares Beneficially Owned | | | Cash Value of Shares Beneficially Owned ($) |
Executive Officers | | | | | ||
Athena Countouriotis, M.D., Chief Executive Officer and Director | | | 31,597 | | | $2,401,372 |
Paolo Tombesi, Executive Vice President and Chief Financial Officer | | | 1,078 | | | $81,928 |
Mohammad Hirmand, M.D., Executive Vice President and Chief Medical Officer | | | 2,439 | | | $185,364 |
Brian Sun, M.S., J.D., Senior Vice President and General Counsel | | | — | | | — |
Steve Sabus, Senior Vice President and Chief Commercial Officer | | | — | | | — |
Directors | | | | | ||
Mark J. Alles, Chair of the Board | | | 2,000 | | | $152,000 |
Barbara W. Bodem, Director | | | — | | | — |
Carol Gallagher, Pharm.D., Director | | | — | | | — |
Simeon J. George, M.D., M.B.A, Director(1) | | | 2,253,660 | | | $171,278,160 |
Patrick Machado, J.D., Director | | | — | | | — |
Garry Nicholson, Director | | | — | | | — |
All of our current directors and executive officers as a group (11 persons) | | | 2,290,774 | | | $174,098,824 |
(1) | Includes 2,253,660 shares of common stock held by S.R. One, Limited and/or its affiliated funds. Dr. George is a Partner at S.R. One, Limited. |
| | In-the-Money Options | | | RSUs | | | PSUs | | | Total Cash Value ($) | |||||||||||||
Name | | | Number of Shares Underlying In-the- Money Options | | | Weighted Average Exercise Price per Share ($) | | | Cash Spread Value of In-the- Money Options ($) | | | Number of Shares Underlying RSUs | | | Cash Value of RSUs ($) | | | Number of Shares Underlying PSUs | | | Cash Value of PSUs ($) | | ||
Executive Officers | | | | | | | | | | | | | | | | | ||||||||
Athena Countouriotis, M.D., Chief Executive Officer and Director | | | 1,936,419 | | | $18.61 | | | $111,124,013 | | | 79,362 | | | $6,031,512 | | | 47,440 | | | $3,605,440 | | | $120,760,965 |
Paolo Tombesi, Executive Vice President and Chief Financial Officer | | | 119,800 | | | $50.43 | | | $3,063,796 | | | 29,883 | | | $2,271,108 | | | 12,770 | | | $970,520 | | | $6,305,424 |
Mohammad Hirmand, M.D., Executive Vice President and Chief Medical Officer | | | 237,559 | | | $49.82 | | | $6,218,537 | | | 38,845 | | | $2,952,220 | | | 15,390 | | | $1,169,640 | | | $10,340,397 |
Brian Sun, M.S., J.D., Senior Vice President and General Counsel | | | 195,000 | | | $24.65 | | | $10,013,250 | | | 45,000 | | | $3,420,000 | | | — | | | — | | | $13,433,250 |
Steve Sabus, Senior Vice President and Chief Commercial Officer | | | 165,000 | | | $35.37 | | | $6,703,950 | | | 36,667 | | | $2,786,692 | | | — | | | — | | | $9,490,642 |
Directors | | | | | | | | | | | | | | | | | ||||||||
Mark J. Alles, Chair of the Board | | | 17,209 | | | $70.54 | | | $93,965 | | | — | | | — | | | — | | | — | | | $93,965 |
Barbara W. Bodem, Director | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Carol Gallagher, Pharm.D., Director | | | 47,000 | | | $49.22 | | | $1,258,545 | | | — | | | — | | | — | | | — | | | $1,258,545 |
Simeon J. George, M.D., M.B.A, Director | | | 32,000 | | | $47.49 | | | $912,345 | | | — | | | — | | | — | | | — | | | $912,345 |
Patrick Machado, J.D., Director | | | 47,000 | | | $42.57 | | | $1,571,445 | | | — | | | — | | | — | | | — | | | $1,571,445 |
Garry Nicholson, Director | | | 31,900 | | | $60.85 | | | $483,286 | | | — | | | — | | | — | | | — | | | $483,286 |
All of our current directors and executive officers as a group (11 persons) | | | 2,828,887 | | | $25.70 | | | $141,443,132 | | | 229,757 | | | $17,461,532 | | | 75,600 | | | $5,745,600 | | | $164,650,264 |
Name | | | 2022 Performance Bonus ($)(1) |
Athena Countouriotis, M.D., Chief Executive Officer and Director | | | $726,285 |
Paolo Tombesi, Executive Vice President and Chief Financial Officer | | | $307,755 |
Mohammad Hirmand, M.D., Executive Vice President and Chief Medical Officer | | | $330,750 |
Brian Sun, M.S., J.D., Senior Vice President and General Counsel | | | $202,774 |
Steve Sabus, Senior Vice President and Chief Commercial Officer | | | $177,298 |
(1) | The amounts in this column assumes 150% of corporate achievement (which is an estimate only and assumed solely for purposes of the disclosure in this section). The amounts in this column for each of Mr. Sun and Mr. Sabus are prorated to reflect their April 11, 2022 and May 31, 2022 start dates with the Company, respectively. The amounts in this column do not reflect any bonus payments an executive may receive upon a termination of service in connection with the Merger; such amounts are described further below in the section titled “—Golden Parachute Payments.” |
Named Executive Officer(1) | | | Cash ($)(2) | | | Equity ($)(3) | | | Perquisites / Benefits ($)(4) | | | Tax Reimbursements ($)(5) | | | Total ($) |
Athena Countouriotis, M.D., Chief Executive Officer and Director | | | $2,351,780 | | | $24,836,671 | | | $14,568 | | | $5,321,658 | | | $32,524,677 |
Paolo Tombesi, Executive Vice President and Chief Financial Officer | | | $708,325 | | | $6,071,519 | | | $34,728 | | | $1,727,466 | | | $8,542,038 |
Mohammad Hirmand, M.D., Executive Vice President and Chief Medical Officer | | | $761,250 | | | $7,818,686 | | | $21,732 | | | $2,118,917 | | | $10,720,585 |
Siegfried Reich, Ph.D., Former Executive Vice President and Chief Scientific Officer | | | — | | | — | | | — | | | — | | | — |
Annette North, Former Executive Vice President and General Counsel | | | — | | | — | | | — | | | — | | | — |
Yi Larson, Former Executive Vice President and Chief Financial Officer | | | — | | | — | | | — | | | — | | | — |
Brian Baker, M.S., C.P.A., Former Senior Vice President, Finance and Administration | | | — | | | — | | | — | | | — | | | — |
(1) | Under relevant SEC rules, we are required to provide information in this table with respect to our “named executive officers,” who are generally the individuals whose compensation was required to be reported in the summary compensation table of our most recent proxy statement. While disclosure is, therefore, required with respect to each of Siegfried Reich, Ph.D., our former Executive Vice President and Chief Scientific Officer, Annette North, our former Executive Vice President and General Counsel, Yi Larson, our former Executive Vice President and Chief Financial Officer, and Brian Baker, M.S., C.P.A., our former Senior Vice President, Finance and Administration, each of the listed individuals terminated employment with us prior to the Transactions. Ms. Larson resigned in March 2021, Mr. Baker resigned in May 2021, Mr. Reich resigned in February 2022, and Ms. North resigned in March 2022. As a result, none of these listed individuals will receive compensation that is based on or otherwise relates to the Transaction. |
(2) | The cash amount included in this column represents severance paid in the form of a lump sum cash payment under our Severance Benefit Plan, as further described above in the section titled “—Potential Payments and Benefits upon Termination or Change in Control—Severance Benefit Plan,” equal to the sum of (a) the named executive officer’s then-current annual base salary (or two times her then-current annual base salary in the case of Dr. Countouriotis) and (b) the named executive officer’s target annual bonus amount (or two times her 2022 target annual bonus amount in the case of Dr. Countouriotis). The cash severance amounts are “double trigger” (i.e., they are contingent upon a covered termination that occurs within one year following the consummation of the Transaction). The table below sets forth the breakdown of these cash payments. |
Named Executive Officer | | | Severance Payment – Base Salary ($) | | | Severance Payment – Target Annual Bonus ($) | | | Total ($) |
Athena Countouriotis, M.D. | | | $1,383,400 | | | $968,380 | | | $2,351,780 |
Paolo Tombesi | | | $488,500 | | | $219,825 | | | $708,325 |
Mohammad Hirmand, M.D. | | | $525,000 | | | $236,250 | | | $761,250 |
Siegfried Reich, Ph.D. | | | — | | | — | | | — |
Annette North | | | — | | | — | | | — |
Yi Larson | | | — | | | — | | | — |
Brian Baker, M.S., C.P.A. | | | — | | | — | | | — |
(3) | The amounts listed in this column represents the cash value of the “single-trigger” vesting acceleration that the named executive officer will receive with respect to his or her In-the-Money Options, RSUs, and certain PSUs pursuant to the terms of the Merger Agreement, as further described above in the section titled “—Treatment of Options, RSUs, and PSUs” above. The estimated value of each such benefit is shown in the table below. |
Named Executive Officer | | | Options ($) | | | RSUs ($) | | | PSUs ($) | | | Total ($) |
Athena Countouriotis, M.D. | | | $15,199,719 | | | $6,031,512 | | | $3,605,440 | | | $24,836,671 |
Paolo Tombesi | | | $2,829,891 | | | $2,271,108 | | | $970,520 | | | $6,071,519 |
Mohammad Hirmand, M.D. | | | $3,696,826 | | | $2,952,220 | | | $1,169,640 | | | $7,818,686 |
Siegfried Reich, Ph.D. | | | — | | | — | | | — | | | — |
Annette North | | | — | | | — | | | — | | | — |
Yi Larson | | | — | | | — | | | — | | | — |
Brian Baker, M.S., C.P.A. | | | — | | | — | | | — | | | — |
(4) | The amount listed in this column represents the value of payment of company-paid COBRA premiums under our Severance Benefit Plan, as further described above in the section titled “—Potential Payments and Benefits upon Termination or Change in Control—Severance Benefit Plan.” These amounts are “double trigger” amounts and are subject to the same conditions as the cash severance payment described above. |
Named Executive Officer | | | Benefits Continuation ($) |
Athena Countouriotis, M.D. | | | $14,568 |
Paolo Tombesi | | | $34,728 |
Mohammad Hirmand, M.D. | | | $21,732 |
Siegfried Reich, Ph.D. | | | — |
Annette North | | | — |
Yi Larson | | | — |
Brian Baker, M.S., C.P.A. | | | — |
(5) | The amounts in this column represent an estimate of the maximum tax reimbursement that could be paid to the individual assuming a closing date of June 19, 2022 (which is the assumed closing date of the Merger solely for purposes of the disclosure in this section). Under the terms of the Merger Agreement, Turning Point may make tax reimbursement payments of up to an aggregate of $15 million to Dr. Countouriotis, Mr. Tombesi, Dr. Hirmand and one other officer who is not a named executive officer, for excise taxes under Section 4999 of the Code in connection with the Transactions, as described in more detail in the section titled “—Potential Payments and Benefits upon Termination or Change in Control—Tax Reimbursement Agreements” above. Some amounts might never be paid due to the triggering event (such as termination of employment) not occurring and such amounts may be reduced depending on the actual closing date. At this time, the amount of such tax reimbursement payments is uncertain and the amounts in this column are only an estimate. |
The Solicitation or Recommendation. |
(i) | Background of the Offer and the Merger |
(ii) | Reasons for Recommendation |
• | Financial Terms of the Offer & Certainty of Value. The Board considered the aggregate value and form of the consideration to be received in the Offer and the Merger by Turning Point’s stockholders, and considered: |
• | the current and historical market prices of the Shares, including the market performance of the Shares relative to general market indices, and the fact that the cash Offer Price of $76.00 per Share represents a premium of: (i) approximately 122% to the closing price of common stock of $34.16 per share on June 2, 2022, the last full trading day prior to the announcement of the Offer and the Merger; (ii) approximately 7% to the 52-week high closing price of common stock; (iii) approximately 144% to the 30-day trading period volume weighted average price (“VWAP”) of common stock; (iv) approximately 147% to the 60-day trading period VWAP of common stock; (v) approximately 155% to the 90-day trading period VWAP of common stock; and (vi) approximately 322% to Turning Point’s initial public offering price; |
• | the fact that, during the course of negotiations with Bristol-Myers Squibb (as more fully described in the section above titled “—Background of the Offer and the Merger”), Bristol-Myers Squibb increased its initial offer from $58.00 per share on May 6, 2022, to $70.00 per share on May 14, 2022, to $75.00 per share on May 26, 2022, and then, ultimately, to $76.00 per share on June 2, 2022; |
• | the Board’s belief that (i) as a result of an active negotiating process, Turning Point had obtained Bristol-Myers Squibb’s best offer, (ii) there was substantial risk of losing Bristol-Myers Squibb’s final offer of $76.00 per Share if Turning Point continued to pursue a higher price and (iii) based on the conversations and negotiations with Bristol-Myers Squibb, as of the date of the Merger Agreement, the Offer Price of $76.00 per Share represented the highest price reasonably obtainable by Turning Point under the circumstances; |
• | the fact that Turning Point conducted a robust partnering process for its lead asset, repotrectinib, that enabled it to (i) identify strategic parties that were likely to be interested in acquiring Turning Point, (ii) optimize its strategic alternative of continuing to operate as a standalone public company and (iii) create a competitive dynamic in the negotiating process with Bristol-Myers Squibb relating to the Offer, the fact that Bristol-Myers Squibb withdrew its partnering proposal and indicated that it was willing to pursue only the acquisition and the fact that the party who offered the best partnering terms (excluding Bristol-Myers Squibb’s withdrawn partnering proposal) was unwilling to enter into the partnering transaction until Turning Point received minutes from its pre-NDA meeting with the FDA in late June 2022; |
• | the fact that the consideration to be paid in the Offer and the Merger is payable solely in cash, which allows Turning Point’s stockholders to realize immediate and certain value in respect of |
• | the current state of the U.S. and global economies, including the recent downward trend in the biopharmaceutical financial markets, increased volatility resulting from escalating political and global trade tensions, and the current and potential impact in both the near term and long term on the biopharmaceutical industry and the future commercialization efforts required if any of Turning Point’s product candidates are approved for sale, including the numerous risks, costs and uncertainties associated with research, development and commercialization of Turning Point’s pipeline programs and candidates that Turning Point may develop; and |
• | the oral opinion of Goldman Sachs rendered to the Board, subsequently confirmed in writing by delivery of its written opinion, dated June 2, 2022, that, as of the date of such opinion and based upon and subject to the factors and assumptions set forth in its written opinion, the Offer Price to be paid to holders (other than Bristol-Myers Squibb and its Affiliates) of Shares pursuant to the Merger Agreement was fair from a financial point of view to such holders (as more fully described in the section below titled “—Opinion of Goldman Sachs & Co. LLC”). The full text of the written opinion of Goldman Sachs, dated June 2, 2022, has been included as Annex I to this Schedule 14D-9 and is incorporated herein by reference. |
• | Likelihood and Speed of Consummation of the Offer and the Merger. The Board considered the likelihood that the Transactions will be consummated in a timely manner, including: |
• | the financial strength of Bristol-Myers Squibb and its ability to fund the Offer Price with cash on hand; |
• | the absence of any financing condition in the Merger Agreement; |
• | the business reputation and capabilities of Bristol-Myers Squibb, including Bristol-Myers Squibb’s track record of successfully completing merger and acquisition transactions; |
• | the likelihood of obtaining required regulatory approvals; |
• | the limited nature of the conditions to Bristol-Myers Squibb’s obligations to consummate the Offer and the Merger, including the definition of “Material Adverse Effect” in the Merger Agreement that includes COVID-19 related carveouts and the exclusion of certain regulatory, manufacturing, clinical and related matters relating to the products of Turning Point and Bristol-Myers Squibb, provides a high degree of likelihood that the Offer and the Merger will be consummated, as described in more detail in Section 13 (The Transaction Documents—The Merger Agreement) of the Offer to Purchase; |
• | the fact that the completion of the Offer is conditioned on meeting the Minimum Condition (as defined in the section below titled “Item 8. Additional Information—Stockholder Approval Not Required”), which condition cannot be changed or waived without the prior written consent of Turning Point; and |
• | the Transaction is structured as a cash tender offer for all outstanding Shares, with the expected result that a relatively short period will elapse before Turning Point’s stockholders receive the Offer Price, followed by the Merger under Section 251(h) of the DGCL, which would not require additional stockholder approval, and in which stockholders who do not validly exercise appraisal rights will receive the same consideration received by those stockholders who tender their Shares in the Offer. |
• | Opportunity to Receive Unsolicited Alternative Proposals, Terminate the Merger Agreement in Order to Accept a Superior Proposal, and Receive a Reverse Termination Fee in the Event the Merger Agreement Is Terminated Under Certain Circumstances, Among Other Factors. The Board considered the following: |
• | Turning Point’s right, subject to certain conditions, to respond to and negotiate unsolicited acquisition proposals that are made on or after June 2, 2022 and prior to the time that the Offer is consummated; |
• | the provision in the Merger Agreement allowing the Board to terminate the Merger Agreement in order to accept and enter into a definitive agreement with respect to an unsolicited superior offer, subject to payment of a termination fee of $138,000,000, which amount the Board believed to be reasonable under the circumstances and taking into account the range of such termination fees in similar transactions, and the unlikelihood that a fee of such size would be a meaningful deterrent to alternative acquisition proposals; |
• | the ability of the Board under the Merger Agreement to withdraw or modify its recommendation that Turning Point’s stockholders tender their Shares pursuant to the Offer in certain circumstances, including in connection with a superior offer or development constituting a change in circumstances; |
• | the provision in the Merger Agreement requiring Bristol-Myers Squibb to pay Turning Point a reverse termination fee of $138,000,000 in cash in the event the Merger Agreement is terminated after the End Date (as defined in the Merger Agreement), as a result of certain conditions related to antitrust laws not being satisfied; |
• | the provision in the Merger Agreement requiring Bristol-Myers Squibb to, under certain circumstances, extend the Offer beyond the initial expiration date of the Offer or, if applicable, subsequent expiration dates, if the conditions to the consummation of the Offer are not satisfied or waived as of such date; and |
• | the availability of statutory appraisal rights to the stockholders of Turning Point who do not tender their Shares in the Offer and otherwise comply with all required procedures under the DGCL. |
• | Product Development and Commercialization Risks. The Board’s assessment of Turning Point’s prospects for substantially increasing stockholder value as a standalone company in excess of the Offer Price, given the risks and uncertainties in Turning Point’s business, including: |
• | the fact that Turning Point has never commercialized a product and the fact that Turning Point’s lead product development candidate, repotrectinib, has not yet been approved for marketing by the U.S. Federal and Drug Administration (“FDA”) or by any similar non-U.S. regulatory body, as well as the status and prospects for Turning Point’s current pipeline of other drug candidates, and the risks inherent in the research, development, regulatory review and potential future commercialization of these drug candidates; |
• | the significant risks and challenges associated with commercializing each of repotrectinib and elzovantinib, including product development and pre-commercial operations, the costs associated with successfully scaling commercial operations globally, the possible failure or delays of current or future preclinical studies or clinical trials and the risk that Turning Point is unable to generate adequate product revenue or achieve profitability; |
• | the risk in Turning Point’s ability to successfully enter into and monetize its assets through license, collaboration or co-promote agreements or partnerships with industry members that possess comparable resources, commitment to research and development and track record of successfully commercializing drug candidates, and the risks associated with any such agreements or partnerships; |
• | the risk in Turning Point’s ability to advance the development of the asset in-licensed recently from LaNova Medicines Limited and Turning Point’s ability to discover and advance the development of new pipeline assets and/or acquire new pipeline programs through business development; |
• | the outcome, timing and costs of bringing repotrectinib to market and risks if Turning Point is unable to maximize its potential across a range of oncology indications; |
• | the reliance on third parties or partners to conduct clinical trials and the risks and costs of hiring additional personnel as Turning Point’s pre-commercial and clinical activities increase; |
• | the risks and costs of developing a commercial infrastructure in anticipation of obtaining marketing approval of repotrectinib; |
• | adverse side effects or other safety risks associated with repotrectinib, elzovantinib or Turning Point’s other drug candidates could delay or preclude approval, cause suspension or discontinuation of clinical trials or abandonment of further development, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any; |
• | the risks inherent in obtaining regulatory approvals from regulatory authorities and adequate reimbursement from regulatory authorities and other third party payors to be able to sell repotrectinib and Turning Point’s other product candidates; |
• | the outcome, timing and costs of seeking regulatory and marketing approvals for Turning Point’s drug candidates and other product development programs; and |
• | risks and potential delays relating to the manufacturing and supply of Turning Point’s drug candidates and future drug candidates for clinical trials and in preparation for commercialization, and the risk of reliance on suppliers, including due to the failure to comply with manufacturing regulations. |
• | the fact that the Offer Price, while providing relative certainty of value, would not allow Turning Point’s stockholders to participate in the possible growth and potential future earnings of Turning Point following the completion of the Transactions, including potential positive outcomes in Turning Point’s drug candidates, which could result if Turning Point remained an independent, publicly traded company; |
• | the fact that the pendency of the Merger may cause Turning Point to experience disruptions to its business operations and future prospects, including its relationships with its employees, vendors and partners and others that do business or may do business in the future with Turning Point and the effect of such disruptions on Turning Point’s operating results in the event that the Transactions are not consummated in a timely manner; |
• | the potential risk of diverting management attention and resources from the operation of Turning Point’s business and towards completion of the Offer and the Merger; |
• | the interests of Turning Point’s executive officers and directors and the fact that Turning Point’s executive officers and directors may be deemed to have interests in the Transactions, including the Offer and the Merger, that may be different from or in addition to those of Turning Point’s stockholders, generally, as described in the section above titled “Item 3. Past Contacts, Transactions, Negotiations and Agreements—Arrangements between Turning Point and its Executive Officers, Directors and Affiliates”; |
• | the costs involved in connection with entering into and completing the Transactions and related actions; |
• | the risk that the Offer and other Transactions are not consummated in a timely manner or at all, and the effect of a resulting public announcement of the termination of the Merger Agreement (other than in connection with a superior offer) on: |
• | the trading price of Turning Point’s common stock, which could be adversely affected by many factors, including (i) the reason the Merger Agreement was terminated and whether such termination results from factors adversely affecting Turning Point, (ii) the possibility that the marketplace would consider Turning Point to be an unattractive acquisition candidate and (iii) the possible sale of Shares by investors following the announcement of a termination of the Merger Agreement; |
• | Turning Point’s ability to attract and retain key personnel and other employees and the possible loss of key management or other personnel during the pendency of the Merger; and |
• | Turning Point’s operating results, particularly in light of the significant transaction and opportunity costs expended attempting to consummate the Transactions; |
• | the effect of the non-solicitation provisions of the Merger Agreement that restrict Turning Point’s ability to solicit or, subject to certain exceptions, engage in discussions or negotiations with third parties regarding a proposal to acquire Turning Point, and the fact that, upon termination of the Merger Agreement under certain specified circumstances, Turning Point will be required to pay a termination fee of $138,000,000, which could discourage certain alternative proposals for an acquisition of Turning Point within 12 months of the date of termination of the Merger Agreement or adversely affect the valuation that might be proposed by a third party; |
• | the fact that the gain realized by Turning Point’s stockholders as a result of the Offer and the Merger generally will be taxable to the stockholders for U.S. federal income tax purposes; |
• | the effect of the restrictions in the Merger Agreement on the conduct of Turning Point’s business prior to the consummation of the Merger, which may delay or prevent Turning Point from undertaking business opportunities that may arise prior to the consummation of the Merger or any other action Turning Point would otherwise take with respect to the operations of Turning Point absent the pending Merger; |
• | the fact that the completion of the Merger will require certain antitrust clearance and consents, which clearances and consents could subject the Merger to unforeseen delays and risks; and |
• | other risks of the type and nature as further described below in the section titled “Item 8. Additional Information—Cautionary Note Regarding Forward-Looking Statements.” |
(iii) | Certain Financial Projections |
| | | Q2-Q4 2022 | | | 2023 | | | 2024 | | | 2025 | | | 2026 | | | 2027 | | | 2028 | | | 2029 | | | 2030 | | | 2031 | | | 2032 | | | 2033 | | | 2034 | | | 2035 | | | 2036 | | | 2037 | | | 2038 | | | 2039 | | | 2040 | | | 2041 | | | 2042 | | | 2043 | | | 2044 | | |
| Unlevered Free Cash Flow(1) | | | $121 | | | ($326) | | | ($250) | | | ($128) | | | $170 | | | $180 | | | $348 | | | $406 | | | $458 | | | $485 | | | $555 | | | $648 | | | $766 | | | $899 | | | $799 | | | $728 | | | $762 | | | $714 | | | $697 | | | $701 | | | $670 | | | $599 | | | $538 | |
(1) | Unlevered free cash flow is calculated as NOPAT as adjusted for changes in working capital. The calculation did not reflect any depreciation and amortization or capital expenditures, and NOPAT did not reflect any stock based compensation expense. As instructed by Turning Point senior management, Goldman Sachs did not offset Turning Point’s taxes by NOLs, resulting in a decrease to unlevered free cash flow of $30 million in 2022, $37 million in 2026, $39 million in 2027, $75 million in 2028 and $59 million in 2029. |
| | | Q2-Q4 2022 | | | 2023 | | | 2024 | | | 2025 | | | 2026 | | | 2027 | | | 2028 | | | 2029 | | | 2030 | | | 2031 | | | 2032 | | | 2033 | | | 2034 | | | 2035 | | | 2036 | | | 2037 | | | 2038 | | | 2039 | | | 2040 | | | 2041 | | | 2042 | | | 2043 | | | 2044 | | | 2045 | | | 2046 | | |
| Total Unadjusted Revenue | | | $350 | | | $4 | | | $83 | | | $237 | | | $1,027 | | | $755 | | | $1,353 | | | $1,430 | | | $1,794 | | | $2,398 | | | $3,325 | | | $4,524 | | | $6,080 | | | $7,951 | | | $9,367 | | | $10,656 | | | $12,116 | | | $13,241 | | | $14,527 | | | $15,644 | | | $15,636 | | | $14,766 | | | $14,152 | | | $14,258 | | | $14,535 | |
| Adjusted Revnue by Product | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||
| Repotrectinib - ROS1+ NSCLC | | | — | | | $4 | | | $73 | | | $200 | | | $307 | | | $379 | | | $422 | | | $447 | | | $452 | | | $394 | | | $398 | | | $411 | | | $427 | | | $443 | | | $222 | | | $55 | | | $3 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Repotrectinib - NTRK+ Solid Tumors | | | — | | | — | | | $1 | | | $12 | | | $37 | | | $62 | | | $76 | | | $85 | | | $92 | | | $94 | | | $98 | | | $103 | | | $107 | | | $111 | | | $56 | | | $14 | | | $1 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Repotrectinib - Zai Royalties | | | — | | | — | | | $0 | | | $2 | | | $4 | | | $5 | | | $6 | | | $5 | | | $5 | | | $5 | | | $5 | | | $5 | | | $5 | | | $5 | | | $2 | | | $1 | | | $0 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Elzovantinib | | | — | | | — | | | — | | | — | | | $12 | | | $72 | | | $144 | | | $175 | | | $191 | | | $199 | | | $205 | | | $213 | | | $221 | | | $229 | | | $238 | | | $246 | | | $256 | | | $128 | | | $32 | | | $2 | | | — | | | — | | | — | | | — | | | — | |
| TPX-0046 | | | — | | | — | | | — | | | — | | | $1 | | | $12 | | | $38 | | | $58 | | | $63 | | | $65 | | | $67 | | | $69 | | | $72 | | | $75 | | | $77 | | | $80 | | | $83 | | | $41 | | | $10 | | | $1 | | | — | | | — | | | — | | | — | | | — | |
| TPX-0131 | | | — | | | — | | | — | | | — | | | $2 | | | $13 | | | $28 | | | $31 | | | $32 | | | $33 | | | $34 | | | $35 | | | $37 | | | $38 | | | $39 | | | $41 | | | $43 | | | $44 | | | $46 | | | $23 | | | $6 | | | $0 | | | — | | | — | | | — | |
| TPX-4589 | | | — | | | — | | | — | | | — | | | — | | | — | | | $2 | | | $12 | | | $18 | | | $18 | | | $19 | | | $29 | | | $60 | | | $80 | | | $85 | | | $88 | | | $91 | | | $94 | | | $97 | | | $60 | | | $36 | | | $27 | | | — | | | — | | | — | |
| Platform(1) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | $19 | | | $66 | | | $133 | | | $213 | | | $307 | | | $431 | | | $555 | | | $664 | | | $775 | | | $889 | | | $1,006 | | | $1,128 | | | $1,149 | | | $1,091 | | | $1,061 | | | $1,069 | | | $1,090 | |
| Upfront Royalty Payments | | | $350 | | | — | | | — | | | — | | | $190 | | | — | | | $25 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total Adjusted Revenue(2) | | | $350 | | | $4 | | | $74 | | | $213 | | | $553 | | | $544 | | | $740 | | | $813 | | | $871 | | | $875 | | | $959 | | | $1,079 | | | $1,235 | | | $1,412 | | | $1,274 | | | $1,190 | | | $1,250 | | | $1,196 | | | $1,191 | | | $1,213 | | | $1,191 | | | $1,118 | | | $1,061 | | | $1,069 | | | $1,090 | |
| NOPAT(3) | | | $98 | | | ($356) | | | ($268) | | | ($136) | | | $170 | | | $180 | | | $347 | | | $401 | | | $452 | | | $478 | | | $551 | | | $647 | | | $768 | | | $904 | | | $800 | | | $736 | | | $782 | | | $739 | | | $734 | | | $750 | | | $732 | | | $674 | | | $628 | | | $634 | | | $653 | |
| Unlevered Free Cash Flow(4) | | | $90 | | | ($366) | | | ($275) | | | ($144) | | | $162 | | | $173 | | | $341 | | | $399 | | | $451 | | | $478 | | | $549 | | | $643 | | | $763 | | | $898 | | | $803 | | | $738 | | | $779 | | | $740 | | | $733 | | | $749 | | | $732 | | | $675 | | | $630 | | | $634 | | | $652 | |
(1) | Includes two INDs per year in 2023 and 2024 and one IND per year thereafter. |
(2) | Total adjusted revenue assumes probability of success rates as follows: 90% for repotrectinib - ROS1+ NSCLC; 90% for repotrectinib - NTRK+ Solid Tumors; 90% for repotrectinib – Zai Royalties; 50% for elzovantinib; 25% for TPX-0046; 20% for TPX-0131; 12.5% for TPX-4589; and 7.5% for Platform. |
(3) | NOPAT is calculated as total adjusted revenue less (i) cost of goods sold, less (ii) total operating expenses, which include the impact of research and development expenses, general and administrative expenses, commercial expenses, depreciation and amortization and stock-based compensation, less (iii) taxes (assuming a long-term tax rate of 21%). |
(4) | Unlevered free cash flow is calculated as NOPAT plus (i) depreciation and amortization, less (ii) capital expenditures, adjusted for (iii) changes in working capital. As instructed by Turning Point senior management, Goldman Sachs did not offset Turning Point’s taxes by NOLs, resulting in a decrease to unlevered free cash flow of $25 million in 2022, $36 million in 2026, $38 million in 2027, $74 million in 2028 and $71 million in 2029. For more information, please see the section below titled “—Opinion of Goldman Sachs & Co. LLC.” |
| | | Q2-Q4 2022 | | | 2023 | | | 2024 | | | 2025 | | | 2026 | | | 2027 | | | 2028 | | | 2029 | | |
| Post-2017 NOL Ending Balance | | | $383 | | | $702 | | | $937 | | | $1,042 | | | $870 | | | $688 | | | $337 | | | — | |
| Total NOL Utilized | | | $120 | | | — | | | — | | | — | | | $172 | | | $182 | | | $352 | | | $337 | |
| NOL Tax Savings | | | $25 | | | — | | | — | | | — | | | $36 | | | $38 | | | $74 | | | $71 | |
(iv) | Opinion of Goldman Sachs & Co. LLC |
• | the Merger Agreement; |
• | annual reports to stockholders and Annual Reports on Form 10-K of Turning Point for the three fiscal years ended December 31, 2019, December 31, 2020 and December 31, 2021, respectively; |
• | Turning Point’s Registration Statement on Form S-1, including the prospectus contained therein dated April 8, 2019, relating to an initial public offering of the Shares; |
• | Turning Point’s Registration Statement on Form S-1, including the prospectus contained therein dated September 5, 2019, and Turning Point’s Registration Statement on Form S-3, including the prospectus contained therein dated May 15, 2020 and the prospectus supplements dated May 18, 2020 and October 29, 2020, relating to follow-on public offerings of the Shares; |
• | certain interim reports to stockholders and Quarterly Reports on Form 10-Q of Turning Point; |
• | certain other communications from Turning Point to its stockholders; |
• | certain publicly available research analyst reports for Turning Point; |
• | the Projections; and |
• | the NOL Forecasts. |
• | a premium of approximately 122% based on the closing price per Share of $34.16 on June 2, 2022, the last trading day before public announcement of the Transactions; |
• | a discount of approximately 7% based on the highest closing price per Share of $81.99 for the 52-week period ended June 2, 2022; |
• | a premium of approximately 144% based on the VWAP per Share of $31.13 for the thirty-calendar day period ended June 2, 2022; |
• | a premium of approximately 147% based on the VWAP per Share of $30.74 for the sixty-calendar day period ended June 2, 2022; |
• | a premium of approximately 155% based on the VWAP per Share of $29.82 for the ninety-calendar day period ended June 2, 2022; and |
• | a premium of approximately 144% based on the VWAP per Share of $31.18 for the period beginning April 13, 2022, the day after the Blinded Independent Central Review Data was released after market close on April 12, 2022, and ended June 2, 2022. |
Date Announced | | | Target | | | Acquirer | | | Premium To Target’s Last Undisturbed Closing Share Price |
November 18, 2021 | | | Dicerna Pharmaceuticals, Inc. | | | Novo Nordisk A/S | | | 80% |
August 23, 2021 | | | Trillium Therapeutics Inc. | | | Pfizer Inc. | | | 204% |
August 3, 2021 | | | Translate Bio, Inc. | | | Sanofi S.A. | | | 30% |
February 1, 2021 | | | Viela Bio, Inc. | | | Horizon Therapeutics Public Limited Company | | | 53% |
August 31, 2020 | | | Aimmune Therapeutics, Inc. | | | Nestle S.A. | | | 174% |
August 17, 2020 | | | Principia BioPharma Inc.(1) | | | Sanofi S.A. | | | 35% |
March 2, 2020 | | | Forty Seven, Inc. | | | Gilead Sciences, Inc. | | | 96% |
December 9, 2019 | | | Synthorx, Inc. | | | Sanofi S.A. | | | 172% |
December 9, 2019 | | | ArQule, Inc. | | | Merck Sharp & Dohme Corp. | | | 107% |
December 2, 2019 | | | Audentes Therapeutics, Inc. | | | Astellas Pharma Inc. | | | 107% |
October 10, 2019 | | | Ra Pharmaceuticals, Inc. | | | UCB S.A. | | | 112% |
February 22, 2019 | | | Spark Therapeutics, Inc. | | | Roche Holding Ltd. | | | 122% |
October 17, 2018 | | | Endocyte, Inc. | | | Navortis AG | | | 50% |
January 28, 2018 | | | Ablynx NV(1) | | | Sanofi S.A. | | | 118% |
75th Percentile | | | | | | | 121% | ||
Median | | | | | | | 107% | ||
25th Percentile | | | | | | | 60% |
(1) | Reflects an undisturbed price that is not the closing price the day prior to announcement. |
(v) | Intent to Tender |
Person/Assets Retained, Employed, Compensated or Used. |
Interest in Securities of the Subject Company. |
Name | | | Date of Transaction | | | Nature of Transaction | | | Number of Shares | | | Price Per Share |
Brian Sun | | | April 11, 2022 | | | RSUs acquired pursuant to an existing Equity Incentive Plan | | | 45,000 | | | $0.00 |
Brian Sun | | | April 11, 2022 | | | Options granted | | | 195,000 | | | $0.00 |
Steve Sabus | | | May 31, 2022 | | | RSUs acquired pursuant to an existing Equity Incentive Plan | | | 36,667 | | | $0.00 |
Steve Sabus | | | May 31, 2022 | | | Options granted | | | 165,000 | | | $0.00 |
Purposes of the Transaction and Plans or Proposals. |
Additional Information. |
• | prior to the later of the consummation of the Offer and 20 days after the mailing of this Schedule 14D-9, deliver to Turning Point at the address indicated below a written demand for appraisal of Shares held, which demand must reasonably inform Turning Point of the identity of the stockholder and that the stockholder is demanding appraisal; |
• | not tender such stockholder’s Shares in the Offer; |
• | continuously hold of record the Shares from the date on which the written demand for appraisal is made through the Effective Time; and |
• | comply with the procedures of Section 262 of the DGCL for perfecting appraisal rights thereafter. |
Exhibits. |
Exhibit No. | | | Description |
(a)(1) | | | Offer to Purchase, dated June 17, 2022 (incorporated by reference to Exhibit (a)(1)(A) to the Schedule TO of Bristol-Myers Squibb Company and Rhumba Merger Sub Inc., filed June 17, 2022 (the “Schedule TO”)). |
| | ||
(a)(2) | | | Form of Letter of Transmittal (including Guidelines for Certification of Taxpayer Identification Number on IRS Form W-9) (incorporated by reference to Exhibit (a)(1)(ii) to the Schedule TO). |
| | ||
(a)(3) | | | Form of Notice of Guaranteed Delivery (incorporated by reference to Exhibit (a)(1)(iii) to the Schedule TO). |
| | ||
(a)(4) | | | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit (a)(1)(iv) to the Schedule TO). |
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(a)(5) | | | Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit (a)(1)(v) to the Schedule TO). |
| | ||
(a)(6) | | | Joint Press Release issued by Bristol-Myers Squibb Company and Turning Point Therapeutics, Inc., dated June 3, 2022 (incorporated by reference to Exhibit 99.1 to Bristol-Myers Squibb’s Schedule TO-C, filed June 3, 2022 and to Exhibit 99.1 to Turning Point’s Current Report on Form 8-K (No. 001-38871), filed June 3, 2022). |
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(a)(7) | | | Transaction Infographic issued by Bristol-Myers Squibb Company, dated June 3, 2022 (incorporated by reference to Exhibit 99.2 to Bristol-Myers Squibb’s Schedule TO-C filed June 3, 2022). |
| | ||
(a)(8) | | | Social Media Content issued by Bristol-Myers Squibb Company, dated June 3, 2022 (incorporated by reference to Exhibit 99.3 to Bristol-Myers Squibb’s Schedule TO-C, filed June 3, 2022). |
| | ||
(a)(9) | | | Enterprise Letter issued by Bristol-Myers Squibb Company, dated June 3, 2022 (incorporated by reference to Exhibit 99.4 to Bristol-Myers Squibb’s Schedule TO-C, filed June 3, 2022). |
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(a)(10) | | | Summary Advertisement, as published in The Wall Street Journal on June 17, 2022 (incorporated by reference to Exhibit (a)(1)(F) to the Schedule TO). |
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(a)(11) | | | Turning Point Therapeutics, Inc. Employee FAQs, first made available on June 3, 2022 (incorporated by reference to Exhibit 99.1 to Turning Point’s Schedule 14D9-C, filed June 3, 2022). |
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(a)(12) | | | Turning Point Therapeutics, Inc. Investor FAQs, first made available on June 3, 2022 incorporated by reference to Exhibit 99.2 to Turning Point’s Schedule 14D9-C, filed June 3, 2022). |
| | ||
(a)(13) | | | Letter to Turning Point Therapeutics, Inc. employees, first sent on June 3, 2022 (incorporated by reference to Exhibit 99.3 to Turning Point’s Schedule 14D9-C, filed June 3, 2022). |
| | ||
| | Opinion of Goldman Sachs & Co. LLC, dated June 2, 2022 (included as Annex I to this Schedule 14D-9). | |
| | ||
(e)(1) | | | Agreement and Plan of Merger, dated as of June 2, 2022, among Turning Point Therapeutics, Inc., Bristol-Myers Squibb Company and Rhumba Merger Sub Inc. (incorporated by reference to Exhibit 2.1 to Turning Point’s Current Report on Form 8-K (No. 001-38871), filed June 3, 2022). |
| | ||
(e)(2) | | | Definitive Proxy Statement of Turning Point Therapeutics, Inc. on Schedule 14A (incorporated by reference to Turning Point’s Form DEF 14A (File No. 001-38871), filed April 29, 2022). |
| |
Exhibit No. | | | Description |
| | Mutual Non-Disclosure Agreement, dated as of March 6, 2022, between Turning Point Therapeutics, Inc. and Bristol-Myers Squibb Company. | |
| | ||
(e)(4) | | | Turning Point Therapeutics, Inc. 2013 Equity Incentive Plan, as amended, and Forms of Stock Option Grant Notice, Option Agreement and Notice of Exercise (incorporated by reference to Exhibit 10.2 to Turning Point’s Form S-1 (File No.001-38871), filed March 21, 2019). |
| | ||
(e)(5) | | | Turning Point Therapeutics, Inc. 2019 Equity Incentive Plan and Forms of Stock Option Grant Notice, Option Agreement and Notice of Exercise (incorporated by reference to Exhibit 10.3 to Turning Point’s Form S-1/A (File No.001-38871), filed April 8, 2019). |
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(e)(6) | | | Turning Point Therapeutics, Inc. 2019 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.4 to Turning Point’s Form S-1/A (File No.001-38871), filed April 8, 2019). |
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(e)(7) | | | Turning Point Therapeutics, Inc. Severance Benefit Plan (SVP/VP) (incorporated by reference to Exhibit 10.6 to Turning Point’s Form S-1, filed March 21, 2019). |
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(e)(8) | | | Turning Point Therapeutics, Inc. Severance Benefit Plan, as amended (C-Suite) November 11, 2021 (incorporated by reference to Exhibit 10.13 of Turning Point’s Form 10-K, filed February 28, 2022). |
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(e)(9) | | | Forms of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement under the Turning Point Therapeutics, Inc. 2019 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 of Turning Point’s Form 10-Q, filed August 10, 2020). |
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(e)(10) | | | Turning Point Therapeutics, Inc. Non-Employee Director Compensation Policy, as amended (incorporated by reference to Exhibit 10.3 of Turning Point’s Form 10-Q, filed May 10, 2022). |
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(e)(11) | | | Executive Employment Agreement by and between Turning Point Therapeutics, Inc. and Athena Countouriotis, M.D., dated September 29, 2018 (incorporated by reference to Exhibit 10.7 to Turning Point’s Form S-1, filed March 21, 2019). |
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(e)(12) | | | Executive Employment Agreement by and between Turning Point Therapeutics, Inc. and Mohammad Hirmand, M.D., dated October 30, 2019 (incorporated by reference to Exhibit 10.3 to Turning Point’s Form 10-Q, filed November 4, 2019). |
| | ||
(e)(13) | | | Executive Employment Agreement by and between Turning Point Therapeutics, Inc. and Paolo Tombesi, dated June 22, 2021 (incorporated by reference to Exhibit 10.2 to Turning Point’s Form 10-Q, filed August 9, 2021). |
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(e)(14) | | | Transition Consulting Agreement by and between Turning Point Therapeutics, Inc. and Annette North, dated February 16, 2022 (incorporated by reference to Exhibit 10.28 to Turning Point’s Form 10-K, filed February 28, 2022). |
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(e)(15) | | | Executive Employment Agreement by and between Turning Point Therapeutics, Inc. and Brian Sun, M.S., J.D., dated March 25, 2022 (incorporated by reference to Exhibit 10.2 to Turning Point’s Form 10-Q, filed May 10, 2022). |
| | ||
(e)(16) | | | Form of Indemnity Agreement by and between Turning Point Therapeutics, Inc and its directors and officers (incorporated by reference to Exhibit 10.1 to Turning Point’s Form S-1/A, filed April 8, 2019). |
1 | Filed herewith. |
| | TURNING POINT THERAPEUTICS, INC. | ||||
| | | | |||
| | By: | | | /s/ Athena Countouriotis | |
| | Name: | | | Athena Countouriotis | |
| | Title: | | | President and Chief Executive Officer |