BIOHAVEN PHARMACEUTICAL HOLDING CO LTD. : Entering a Material Definitive Agreement, Financial Statements and Supporting Documentation (Form 8-K)
Section 1.01 Entering into a Material Definitive Agreement
May 9, 2022, Biohaven Pharmaceutical Holding Company Ltd., a British Virgin Islandsbusiness company limited by shares (the "Company"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with Pfizer Inc., a Delawarecorporation ("Pfizer" or "Parent"), and Bulldog (BVI) Ltd., a British Virgin Islandsbusiness company limited by shares and a wholly owned subsidiary of Parent ("Merger Sub"), pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the "Merger"), with the Company surviving the Merger as a wholly owned subsidiary of Parent. In connection with and as a condition to the Merger, the Company and Biohaven Research Ltd., a British Virgin Islandsbusiness company limited by shares and a wholly owned subsidiary of the Company (" SpinCo)" entered into a Separation and Distribution Agreement, dated as of May 9, 2022(the "Separation Agreement"), pursuant to which, on the terms and subject to the conditions set forth in the Separation Agreement, immediately prior to the effective time of the Merger (the "Effective Time"): (i) the Company will effect a pre-closing reorganization (the "Pre-Closing Reorganization"), which will result in (x) SpinCoowning, assuming or retaining certain assets and liabilities of the Company and its subsidiaries related to the Company's pipeline assets and businesses, and (y) the Company owning, assuming or retaining all other assets and liabilities, including those associated with the Company's platform for the research, development, manufacture and commercialization of calcitonin gene-related peptide receptor antagonists, including rimegepant, zavegepant and the Heptares Therapeutics Limitedpre-clinical CGRP portfolio (the "CGRP Business"); and (ii) thereafter, the Company will distribute to its shareholders as of the record date all of the issued and outstanding common shares of SpinCo, no par value ("SpinCo Common Shares"), on a pro rata basis (the "Spin-Off"), at a ratio of one SpinCo Common Share for every two common shares of the Company (the "Shares"). Following the Spin-Off, SpinCowill be a separate public company and the Company will have no continuing common share ownership interest in SpinCo.
The Merger and the Demerger should be taxable for the shareholders of the Company.
At the effective time of the Merger (the “Effective Time”), each:
(i)Share that is issued and outstanding immediately prior to the Effective Time (other than (A) Shares owned by the Company as treasury shares, (B) Shares owned by Parent or Merger Sub and (C) any dissenting shares) will no longer be outstanding and will automatically be cancelled, extinguished and converted into the right to receive an amount in cash equal to
$148.50, without interest thereon (the "Merger Consideration"); (ii)option to purchase Shares (each, a "Company Option") granted by the Company under the Company's 2017 Equity Incentive Plan or 2014 Equity Incentive Plan (collectively, the "Company Share Plans") that is outstanding as of immediately prior to the Effective Time (after giving effect to the Spin-Off and the provisions of the Separation Agreement), whether or not then vested, will be cancelled and immediately cease to be outstanding and as soon as reasonably practicable following the Effective Time, converted into the right to receive an amount in cash equal to the product of (1) the excess, if any, of the Merger Consideration over the per-share exercise price of such Company Option, multiplied by (2) the number of Shares then subject to such Company Option; and (iii)Company restricted stock unit (each, a "Company RSU") granted by the Company under the Company Share Plans that is outstanding as of immediately prior to the Effective Time (after giving effect to the Spin-Off and the provisions of the Separation Agreement), whether or not vested, will be cancelled and immediately cease to be outstanding and, as soon as reasonably practicable following the Effective Time, converted into the right to receive an amount in cash equal to the product of (i) the Merger Consideration, multiplied by (ii) the number of Shares then subject to such Company RSU, with any performance conditions applicable to Company RSUs that are subject to performance-based vesting conditions deemed achieved at 100%. Consummation of the Merger is subject to certain conditions, including: (i) adoption of the Merger Agreement by holders of a majority of the outstanding Shares and Series A Preferred Shares entitled to vote on such matters at the Company's shareholders meeting and who are present at the shareholders meeting, in person or by proxy (the "Company Requisite Vote"); (ii) the expiration, termination or receipt of any approval or clearances applicable to the consummation of the Merger under applicable antitrust laws, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR Act") and the receipt of certain additional clearances or approvals of certain other governmental bodies applicable to the Merger; (iii) the absence of any law or order prohibiting or making illegal the consummation of the Merger; (iv) effectiveness of the registration statement to be filed with respect to registration of the SpinCo Common Shares (the "Spin-Off Registration Statement"); (v) completion of the Spin-Off; (vi) the absence of certain legal proceedings by governmental authorities imposing certain limitations on Parent's ownership or operation of the Company; (vii) subject to certain qualifications, the accuracy of representations and warranties of 2 -------------------------------------------------------------------------------- the Company, Parent and Merger Sub, as applicable, under the Merger Agreement and the performance in all material respects by the Company, Parent and Merger Sub, as applicable, of their obligations under the Merger Agreement; and (viii) the absence of any Company Material Adverse Effect (as defined in the Merger Agreement).
The Company has made customary representations and warranties in the Merger Agreement and has agreed to customary covenants regarding the operation of the business of the Company and its subsidiaries up to the Effective Time.
The Merger Agreement also includes covenants requiring the Company not to (i) initiate, solicit, knowingly encourage or knowingly facilitate the making of any offer or proposal which constitutes or is reasonably likely to lead to an acquisition proposal, (ii) enter into any agreement with respect to an acquisition proposal or (iii) engage in negotiations or discussions with, or provide any non-public information or data to, any person relating to an acquisition proposal (other than Parent or any of its affiliates or representatives). Notwithstanding these restrictions, the Company may under certain circumstances provide information to and engage in discussions or negotiations with third parties with respect to a bona fide acquisition proposal that the board of directors of the Company (the "Board") determines in good faith, after consultation with the Company's financial advisor, constitutes or is reasonably expected to lead to a Superior Proposal (as defined in the Merger Agreement). In addition, the Board is permitted, subject to the terms and conditions set forth in the Merger Agreement, to make an Company Adverse Recommendation Change (as defined in the Merger Agreement) following receipt of a Superior Proposal that did not result from a material breach of the no-shop covenants in the Merger Agreement, if the Board concludes in good faith, after consultation with outside counsel and its financial advisors, that failure to take such action would reasonably be likely to be inconsistent with the directors' fiduciary duties under applicable law, or in response to a Company Intervening Event (as defined in the Merger Agreement), subject, in each case, to certain matching rights in favor of Parent. The Merger Agreement contains certain termination rights for each of the Company and Parent. Upon termination of the Merger Agreement in accordance with its terms, under certain circumstances, the Company will be required to pay Parent a termination fee in an amount equal to
$450 million, including if the Merger Agreement is terminated due to (i) the Company accepting a superior proposal or (ii) the Company Board changing its recommendation that shareholders vote to approve the Merger Agreement. This termination fee will also be payable by the Company if the Merger Agreement is terminated under certain circumstances and prior to such termination, a proposal to acquire more than 50% of the Company's stock or assets is made or publicly announced and not publicly withdrawn and the Company enters into a definitive agreement for, or completes, any transaction involving the acquisition of more than 50% of its stock or assets within twelve months of such termination. The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete, and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement, which is attached as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference. It is not intended to provide any factual information about the Company, Parent or their respective subsidiaries and affiliates. The representations, warranties and covenants contained in the Merger Agreement have been made solely for the purposes of the Merger Agreement and as of specified dates; were made solely for the benefit of the parties to the Merger Agreement; are not intended as statements of fact to be relied upon by the Company's shareholders, but rather as a way of allocating the risk between the parties in the event that statements therein prove to be inaccurate; have been modified or qualified by certain confidential disclosures that were made between the parties in connection with the negotiation of the Merger Agreement, which disclosures are not reflected in the Merger Agreement itself; may have been made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts; may no longer be true as of a given date; and may apply standards of materiality in a way that is different from what may be viewed as material by the Company's shareholders. The Company's shareholders are not third-party beneficiaries under the Merger Agreement (except, following the Effective Time, with respect to the Company's shareholders' right to receive the Merger Consideration pursuant to the Merger Agreement and the right of the Company on behalf of its shareholders to pursue damages for any willful and material breach by Parent of the Merger Agreement) and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of the Company, Parent or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company's or Parent's public disclosures.
Separation and Distribution Agreement
The Separation Agreement sets forth the terms and conditions regarding the Spin-Off, including the transfer of certain assets by the Company to
SpinCoand the assumption of certain liabilities by SpinCofrom the Company. The Separation Agreement further allocates other assets between SpinCoand the Company and provides for various continuing relationships between the Company's group of companies and SpinCo'sgroup of companies. SpinCowill be funded by a cash contribution immediately prior to the effective time of the Spin-Off from the Company of $275 million, less any marketable securities and cash and cash equivalents held by SpinCo. In addition, following the Effective 3 -------------------------------------------------------------------------------- Time, the Company will make certain tiered royalty payments at percentage rates in the low- to mid-tens to SpinCoin respect of annual net sales of rimegepant and zavegepant in the U.S.in excess $5.25 billion, subject to an annual cap on royalties of $400 millionper year. Such royalty payments would be in respect of years ended on or prior to December 31, 2040. The completion of the Spin-Off is subject to, among other things: (i) satisfaction of the conditions to closing set forth in the Merger Agreement; (ii) the effectiveness of the Spin-Off Registration Statement; (iii) final listing approval from a national securities exchange of the SpinCo Common Shares; (iv) the absence of any law or injunction prohibiting or making illegal the consummation of the Spin-Off, the Pre-Closing Reorganization or the Merger; (v) execution of a transition services agreement, pursuant to which the Company and SpinCowill provide certain services to each other on a transitional basis (the "Transition Services Agreement"); and (vi) completion of the Pre-Closing Reorganization. Prior to the Distribution, the Company will distribute to its shareholders of record, on such date as may be determined by the Company's board of directors (the "Company Board") or a committee of the Company Board as the record date for such Distribution copies of an information statement relating to SpinCothat will be part of the Spin-Off Registration Statement. Under the Separation Agreement, each of the Company and SpinCoagrees to indemnify and hold harmless the other party, and its affiliates and representatives, from losses in connection with, among other things, (i) the liabilities assigned to, or retained by, the other party, as applicable, or (ii) the breach by such party of the Separation Agreement. Each of the Company and SpinCoagrees to release the other party from any and all liabilities existing or arising from any acts or events, including in connection with the Pre-Closing Reorganization, the Distribution or any other transactions contemplated under the Separation Agreement, the Merger Agreement and the Transition Services Agreement, and each of the Company and SpinCoagrees not to bring any proceeding or claim against the other party in respect of such liabilities.
Caution Regarding Forward-Looking Statements
This communication contains forward-looking information about the Pfizer project. . .
Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit Number Exhibit Description 2.1* Agreement and Plan of Merger, dated as of
May 9, 2022, by and among Pfizer Inc., Bulldog (BVI) Ltd.and
Company Ltd.2.2* Separation and Distribution Agreement,
and between Biohaven Pharmaceutical
holding company ltd. and Biohaven
Research Ltd.104 The cover page of this Current Report on Form 8-K formatted as Inline XBRL.
* Certain exhibits and attachments have been omitted pursuant to Section 601(b)(2) of the
exhibitions or schedules omitted on request.
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